Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

We believe that <a href="https://www.smartkarma.com/entities/11641" target="_blank" data-smartkarma-citation="entities:11641:1">Sindoh Co Ltd (029530 KS)</a> (also called Sindoricoh) is well positioned to lead the 3D revolution in Korea. There are three major reasons why we like Sindoricoh. <ol><li>We believe that Sindoh will lead the 3D printing market in Korea. We expect the company's 3D printers to represent about 6 billion won to 7 billion won in sales in 2017, representing only 1.2% of its total sales. However, we expect a blistering growth of the company's 3D printer sales in the next three years. By 2020, we estimate the company's 3D printer business to represent nearly 5-7% of its total sales. Because the 3D printer business is a higher margin business than its traditional printer and copier business, the expansion of the company's 3D printers is likely to result in higher profit margins for the company and higher valuation multiples. </li><li>Net cash is 87% of its market cap! This stock is super cheap on this basis. The company is not willing to cancel its shares but we think that it may be more willing to invest in the newly emerging 3D printing business. Sindoh also pays modest dividends. Its current dividend yield is 2.3%. </li><li>Improving operating margins. The company's operating margins improved to 7.1% in 1H17, up from 5.9% in 1H16, mainly due to improved manufacturing and labor costs associated with moving a part of its manufacturing facility from Korea to Vietnam as well as recent pricing stability of the printers market in Korea from HP's acquisition of Samsung Electronics' printers business in 4Q16. </li></ol>

We believe that Sindoh Co Ltd (029530 KS) (also called Sindoricoh) is well positioned to lead the 3D revolution in Korea. There are three major reasons why we like Sindoricoh. We believe that Sindoh will lead the 3D printing market in Korea. We expect the company's 3D printers to represent about 6 billion won to 7 billion won in sales in 2017, representing only 1.2% of its total sales. However, we expect a blistering growth of the company's 3D printer sales in the next three years. By 2020, we estimate the company's 3D printer business to represent nearly 5-7% of its total sales. Because the 3D printer business is a higher margin business than its traditional printer and copier business, the expansion of the company's 3D printers is likely to result in higher profit margins for the company and higher valuation multiples. Net cash is 87% of its market cap! This stock is super cheap on this basis. The company is not willing to cancel its shares but we think that it may be more willing to invest in the newly emerging 3D printing business. Sindoh also pays modest dividends. Its current dividend yield is 2.3%. Improving operating margins. The company's operating margins improved to 7.1% in 1H17, up from 5.9% in 1H16, mainly due to improved manufacturing and labor costs associated with moving a part of its manufacturing facility from Korea to Vietnam as well as recent pricing stability of the printers market in Korea from HP's acquisition of Samsung Electronics' printers business in 4Q16. 

Sindoh (Sindoricoh) - Poised to Lead the 3D Printing Revolution in Korea

South Korea

Sindoh Co., Ltd. manufactures office equipment such as copiers, facsimiles, printers, and copier related products.  The Company also offers financial services through its subsidiaries.

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Sindoh (Sindoricoh) - Poised to Lead the 3D Printing Revolution in Korea

We believe that Sindoh Co Ltd (029530 KS) (also called Sindoricoh) is well positioned to lead the 3D revolution in Korea. There are three major...

Douglas Kim