Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>Revu Corporation is the number one influencer platform company in Korea with the largest number of influencer members in the industry.</li>
<li>The IPO price range is from 11,500 won to 13,200 won. The maximum total offering amount is 29.5 billion won. </li>
<li>The bankers used three companies including DearU, Silicon2, and Connectwave as comparable companies for Revu Corp. The average P/E of the comps is 32.6x.</li>
</ul>


Revu Corporation is the number one influencer platform company in Korea with the largest number of influencer members in the industry.
The IPO price range is from 11,500 won to 13,200 won. The maximum total offering amount is 29.5 billion won. 
The bankers used three companies including DearU, Silicon2, and Connectwave as comparable companies for Revu Corp. The average P/E of the comps is 32.6x.


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<p><strong>Our base case valuation of Silicon2 Co is implied market cap of 436.5 billion won or 41,975 won per share, which is 54% higher than the high end of the IPO price range of 27,200 won per share. Given the attractive upside, we have a POSITIVE view of the Silicon2 Co IPO and we would subscribe to the IPO deal. </strong></p>
<p>Our base case valuation is based on 28.6x our estimated net profit of 15.3 billion won for the company in 2022. Our valuation multiple of 28.6x P/E is based on the average P/E valuation multiple of the peers in 2022. Our valuation sensitivity analysis suggests a low-high value of 30,222 won per share to 55,407 won per share.</p>
<p>Silicon2 Co has better metrics than its peers for operating margins, ROE, and sales growth. As such, one could make the case of higher valuation multiple for the company as compared to its peers. </p>
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Our base case valuation of Silicon2 Co is implied market cap of 436.5 billion won or 41,975 won per share, which is 54% higher than the high end of the IPO price range of 27,200 won per share. Given the attractive upside, we have a POSITIVE view of the Silicon2 Co IPO and we would subscribe to the IPO deal. 
Our base case valuation is based on 28.6x our estimated net profit of 15.3 billion won for the company in 2022. Our valuation multiple of 28.6x P/E is based on the average P/E valuation multiple of the peers in 2022. Our valuation sensitivity analysis suggests a low-high value of 30,222 won per share to 55,407 won per share.
Silicon2 Co has better metrics than its peers for operating margins, ROE, and sales growth. As such, one could make the case of higher valuation multiple for the company as compared to its peers. 


<p>Silicon2, a company specializing in K-beauty ("Korean beauty") e-commerce platforms, is trying to complete its IPO in the KOSDAQ market in September. Established in 2001, Silicon2 operates 'stylekorean.com' which is a global online shopping mall that sells beauty products. It sells mostly cosmetics to more than 1 million customers in 100 countries around the world, including North America, Japan, Europe, and Southeast Asia. The company actively uses social media sites such as Facebook, Instagram, and Youtube to advertise and market its products. </p><p>The company is offering 1.65 million shares in this IPO offering. The IPO price range is from 23,800 won to 27,200 won per share. At the high end of the IPO price range, IPO offering will be 45 billion won. According to the bankers' valuation, the expected market cap after the IPO is from 248 billion won to 283 billion won. The book building for the institutional investors starts on 9 September. The lead bankers include Samsung Securities and Mirae Asset Securities.</p><div class="content-highlight"><p>The bankers used three companies including <a href="https://www.smartkarma.com/entities/koreacenter-com-co-ltd" target="_blank" data-smartkarma-citation="entities:28329:1" rel="noopener">Koreacenter.com Co Ltd (290510 KS)</a>, BrandX Corp, and <a href="https://www.smartkarma.com/entities/revolve-group-inc" target="_blank" data-smartkarma-citation="entities:27748:1" rel="noopener">Revolve Group Inc (RVLV US)</a> as comps to value Silicon2 Co. The bankers took the net profit of the comps in 1H 2021 and annualized them to derive an average P/E of 44.7x (taking into account recent prices). The bankers then took the annualized net profit of Silicon2 Co in 1H 2021 and applied P/E of 44.7x to derive an implied market cap of 469 billion won (45,061 won per share), pre IPO discount. <strong>After taking into the IPO discount of 39.6% - 47.2%, the company derived the IPO price range of 23,800 - 27,200 won per share.</strong></p></div>

Silicon2, a company specializing in K-beauty ("Korean beauty") e-commerce platforms, is trying to complete its IPO in the KOSDAQ market in September. Established in 2001, Silicon2 operates 'stylekorean.com' which is a global online shopping mall that sells beauty products. It sells mostly cosmetics to more than 1 million customers in 100 countries around the world, including North America, Japan, Europe, and Southeast Asia. The company actively uses social media sites such as Facebook, Instagram, and Youtube to advertise and market its products. The company is offering 1.65 million shares in this IPO offering. The IPO price range is from 23,800 won to 27,200 won per share. At the high end of the IPO price range, IPO offering will be 45 billion won. According to the bankers' valuation, the expected market cap after the IPO is from 248 billion won to 283 billion won. The book building for the institutional investors starts on 9 September. The lead bankers include Samsung Securities and Mirae Asset Securities.The bankers used three companies including Koreacenter.com Co Ltd (290510 KS), BrandX Corp, and Revolve Group Inc (RVLV US) as comps to value Silicon2 Co. The bankers took the net profit of the comps in 1H 2021 and annualized them to derive an average P/E of 44.7x (taking into account recent prices). The bankers then took the annualized net profit of Silicon2 Co in 1H 2021 and applied P/E of 44.7x to derive an implied market cap of 469 billion won (45,061 won per share), pre IPO discount. After taking into the IPO discount of 39.6% - 47.2%, the company derived the IPO price range of 23,800 - 27,200 won per share.

South Korea

Silicon2 operates e-commerce business. The Company wholesales daily necessities, packaged food, makeup products, and other products. SIlicon2 also provides brand planning advertising and marketing services.

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Silicon2 (257720 KS)

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Silicon2 Co IPO Valuation Analysis

Our base case valuation of Silicon2 Co is implied market cap of 436.5 billion won or 41,975 won per share, which is 54% higher than the high end of...

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Silicon2 Co IPO Preview

Silicon2, a company specializing in K-beauty e-commerce platforms, is trying to complete its IPO. Silicon2 operates 'stylekorean.com' which sells...

Douglas Kim

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