Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul><li>Woongjin Thinkbig represents the future of children education.</li><li>Woongjin Thinkbig's Book Club service is the biggest story in the children education market in Korea right now.</li><li>We believe the company's Book Club service is likely to be benchmarked globally. </li><li>We expect an upside range of 37% to 53% for Woongjin Thinkbig shares from current levels over a one year view, using 10x and 11x EV/EBITDA multiples with the base case EBITDA of 80 billion won in 2017.</li><li>The Book Club service is basically a rental system: Woongjin Thinkbig locks in the customer for about 2 years. The Book Club member pays initial membership fee and monthly fees for 24 months. In return, the Book Club member receives a Samsung Galaxy tablet PC, hundreds of fun, interactive digital contents for children including reading curation included books, and points which could be used to purchase off-line books as well. </li><li>The Book Club service has significantly enlarged the business moat of the company. <em>Warren Buffett would be proud!</em></li><li>The surging growth of Book Club and Book Club Study services has resulted in strong earnings growth for the company so far. The company launched the Book Club service in August 2014 and its members reached 102k as of end of 2015. The company is likely to continue to enjoy strong operating and net profit growth over the next two years, bolstered by its Book Club and Book Club services. Consensus expects its net profit to surge 181% from 2015 to 2017. </li></ul><p> </p>

Woongjin Thinkbig represents the future of children education.Woongjin Thinkbig's Book Club service is the biggest story in the children education market in Korea right now.We believe the company's Book Club service is likely to be benchmarked globally. We expect an upside range of 37% to 53% for Woongjin Thinkbig shares from current levels over a one year view, using 10x and 11x EV/EBITDA multiples with the base case EBITDA of 80 billion won in 2017.The Book Club service is basically a rental system: Woongjin Thinkbig locks in the customer for about 2 years. The Book Club member pays initial membership fee and monthly fees for 24 months. In return, the Book Club member receives a Samsung Galaxy tablet PC, hundreds of fun, interactive digital contents for children including reading curation included books, and points which could be used to purchase off-line books as well. The Book Club service has significantly enlarged the business moat of the company. Warren Buffett would be proud!The surging growth of Book Club and Book Club Study services has resulted in strong earnings growth for the company so far. The company launched the Book Club service in August 2014 and its members reached 102k as of end of 2015. The company is likely to continue to enjoy strong operating and net profit growth over the next two years, bolstered by its Book Club and Book Club services. Consensus expects its net profit to surge 181% from 2015 to 2017.  

South Korea

Woongjin Co., Ltd. is a holding company.  The Company, through its subsidiaries, operates after-school study classes.  Woongjin also publishes books and periodicals for education.

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Woongjin Co Ltd (016880 KS)

Children Education Goes Digital

Woongjin Thinkbig represents the future of children education. Woongjin Thinkbig's Book Club service is the biggest story in the children...

Douglas Kim

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