Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

We like the Tapex IPO and recommend investors to take the deal. The company has a solid niche in the rechargeable battery, semiconductor, and F&amp;B purpose tapes in Korea. The company has a long-term goal to generate 500 billion won in revenue by 2025, up from 113 billion won in 2015. We believe that the company could generate 129.7 billion won in revenue with a 7.6% net margins resulting in a net profit of 9.8 billion won in 2018.If we apply a 15x P/E, which is nearly 20% discount to where its…

We like the Tapex IPO and recommend investors to take the deal. The company has a solid niche in the rechargeable battery, semiconductor, and F&amp;B purpose tapes in Korea. The company has a long-term goal to generate 500 billion won in revenue by 2025, up from 113 billion won in 2015. We believe that the company could generate 129.7 billion won in revenue with a 7.6% net margins resulting in a net profit of 9.8 billion won in 2018.If we apply a 15x P/E, which is nearly 20% discount to where its…

Tapex IPO (Valuation Analysis) - A Market Leader in Rechargeable Batteries Tapes

This is an IPO preview of Tapex, a leading manufacturer of industrial tapes in Korea. Established in 1994, Tapex makes various kinds of industrial and specialty tapes for the packaging, electric/electronic such as rechargeable batteries, and semiconductor industries. <a href="https://www.smartkarma.com/entities/12361" target="_blank" data-smartkarma-citation="entities:12361:1">Hansol Chemical Co Ltd (014680 KS)</a> is the largest shareholder of Tapex. As of May 16th, 2017, Hansol Chemical owned a 49.5% stake in Tapex. The following is how the bankers determined the IPO price range for Tapex. Four comparable companies, including NDFos, SKCKolonPi, Yulchon Chem, and Okong were chosen. Next, using their annualized net profit in 1H17, this suggested an average P/E multiple of 18.5x. Using Tapex's annualized 1H17 net profit of 8.0 billion won and applying the average P/E multiple of 18.5x, this resulted in an implied share price of 31,611 won. Using a discount range of 17.7% to 27.2%, this resulted in an IPO price range of 23,000 won to 26,000 won. The company's electric/electronic purpose tapes are used in a wide variety of areas including EV rechargeable batteries, smartphones, tablets, semiconductor, and other electric/electronic products. In the domestic rechargeable batteries purpose tape market (small sized cells), it is estimated that the company had a commanding 61% domestic market share in 2016. The company is also a global leader with about 1/5 of the global rechargeable batteries purpose tape market (small sized cells). The company is developing new tape products for the mid-large sized cells based rechargeable batteries.  <h2>Deal Specifics of the Tapex IPO:</h2><ul><li>Lead manager of the IPO: KB Securities, Shinhan Securities </li><li>Expected IPO offer price per share:  23,000 won (low)/  26,000 won (high)</li><li>Number of Shares for IPO: 1.66m shares (0.39m new shares &amp; 1.27m old shares)</li><li>IPO base deal size: US$34m (low);  US$38m (high)</li></ul>

This is an IPO preview of Tapex, a leading manufacturer of industrial tapes in Korea. Established in 1994, Tapex makes various kinds of industrial and specialty tapes for the packaging, electric/electronic such as rechargeable batteries, and semiconductor industries. Hansol Chemical Co Ltd (014680 KS) is the largest shareholder of Tapex. As of May 16th, 2017, Hansol Chemical owned a 49.5% stake in Tapex. The following is how the bankers determined the IPO price range for Tapex. Four comparable companies, including NDFos, SKCKolonPi, Yulchon Chem, and Okong were chosen. Next, using their annualized net profit in 1H17, this suggested an average P/E multiple of 18.5x. Using Tapex's annualized 1H17 net profit of 8.0 billion won and applying the average P/E multiple of 18.5x, this resulted in an implied share price of 31,611 won. Using a discount range of 17.7% to 27.2%, this resulted in an IPO price range of 23,000 won to 26,000 won. The company's electric/electronic purpose tapes are used in a wide variety of areas including EV rechargeable batteries, smartphones, tablets, semiconductor, and other electric/electronic products. In the domestic rechargeable batteries purpose tape market (small sized cells), it is estimated that the company had a commanding 61% domestic market share in 2016. The company is also a global leader with about 1/5 of the global rechargeable batteries purpose tape market (small sized cells). The company is developing new tape products for the mid-large sized cells based rechargeable batteries.  Deal Specifics of the Tapex IPO:Lead manager of the IPO: KB Securities, Shinhan Securities Expected IPO offer price per share:  23,000 won (low)/  26,000 won (high)Number of Shares for IPO: 1.66m shares (0.39m new shares &amp; 1.27m old shares)IPO base deal size: US$34m (low);  US$38m (high)

South Korea

Tapex Co. Ltd. operates as a tape products manufacturing company. The Company produces and sells polyethylene terephthalate tapes, double sided tapes, molding tapes, transparent tapes, color tapes, and other products. Tapex markets its products throughout Korea.

Tapex Co (055490 KS)

Tapex IPO (Valuation Analysis) - A Market Leader in Rechargeable Batteries Tapes

We like the Tapex IPO and recommend investors to take the deal. The company has a solid niche in the rechargeable battery, semiconductor, and...

Douglas Kim

Tapex IPO Preview (Part 1)

This is an IPO preview of Tapex, a leading manufacturer of industrial tapes in Korea. Established in 1994, Tapex makes various kinds of industrial...

Douglas Kim