Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

YoungLimWon Soft Lab / Equity Capital Markets

<div class="content-highlight">We applied a 25% discount to the comps' average P/E ratio of 32.6x to derive our valuation multiple of 24.5x to value this company. Applying our estimated net profit of 6.6 billion won in 2020, this results in an implied market cap of 162 billion won or implied price of 19,984 won, which would represent a 74% upside versus the high-end IPO price range of 11,500 won. Given the big upside, we have a positive view of this IPO and we include this stock in our model portfolio. </div>Younglimwon Softlab is a leading ERP software provider in Korea with more than 1,700 customers. The company provided the "first" Korean specific ERP software called 'K-System." The IPO book-building for the institutional investors starts on July 27th. We forecast the company to generate sales of 55.9 billion won (up 47.3% YoY) and operating profit of 7 billion won (up 63.8% YoY) in 2020.The Korean software companies have experienced a very strong performance in 2020. The six companies that we have used as comps to Younglimwon Softlab have experienced an average and median share price appreciation of 80.1% and 52.2% YTD.

We applied a 25% discount to the comps' average P/E ratio of 32.6x to derive our valuation multiple of 24.5x to value this company. Applying our estimated net profit of 6.6 billion won in 2020, this results in an implied market cap of 162 billion won or implied price of 19,984 won, which would represent a 74% upside versus the high-end IPO price range of 11,500 won. Given the big upside, we have a positive view of this IPO and we include this stock in our model portfolio. Younglimwon Softlab is a leading ERP software provider in Korea with more than 1,700 customers. The company provided the "first" Korean specific ERP software called 'K-System." The IPO book-building for the institutional investors starts on July 27th. We forecast the company to generate sales of 55.9 billion won (up 47.3% YoY) and operating profit of 7 billion won (up 63.8% YoY) in 2020.The Korean software companies have experienced a very strong performance in 2020. The six companies that we have used as comps to Younglimwon Softlab have experienced an average and median share price appreciation of 80.1% and 52.2% YTD. 

Younglimwon Soft Lab IPO Valuation Analysis

A Korean software company called <a href="https://www.smartkarma.com/entities/younglimwon-soft-lab" target="_blank" data-smartkarma-citation="entities:29183:1" rel="noopener">Younglimwon Soft Lab (YSL KS)</a> is getting ready for an IPO in the next few weeks. The IPO price range is from 9,500 won to 11,500 won. the IPO base deal size is from $13 million to $16 million. According to the bankers' valuation, the expected market cap after the IPO is from 77 billion won to 93 billion won.Established in 1993, Younglimwon Softlab is a leading ERP software provider in Korea with more than 1,700 customers. The company provided the "first" Korean specific ERP software called 'K-System."The company has excellent growth in sales and profits in the past three years. The company had sales of 38 billion won (up 24.9% YoY) and an operating profit of 4.3 billion won (up 191.3% YoY) in 2019. Its sales and operating profit growth continued to accelerate in 1Q 2020 when it achieved sales of 10.8 billion won (up 44.9% YoY) and operating profit of 1.5 billion won (up from an operating loss in 1Q 2019).

A Korean software company called Younglimwon Soft Lab (YSL KS) is getting ready for an IPO in the next few weeks. The IPO price range is from 9,500 won to 11,500 won. the IPO base deal size is from $13 million to $16 million. According to the bankers' valuation, the expected market cap after the IPO is from 77 billion won to 93 billion won.Established in 1993, Younglimwon Softlab is a leading ERP software provider in Korea with more than 1,700 customers. The company provided the "first" Korean specific ERP software called 'K-System."The company has excellent growth in sales and profits in the past three years. The company had sales of 38 billion won (up 24.9% YoY) and an operating profit of 4.3 billion won (up 191.3% YoY) in 2019. Its sales and operating profit growth continued to accelerate in 1Q 2020 when it achieved sales of 10.8 billion won (up 44.9% YoY) and operating profit of 1.5 billion won (up from an operating loss in 1Q 2019). 

South Korea

Younglimwon Soft Lab Co.Ltd operates business application software businesses. The company mainly develops enterprise resource planning software, cloud contents integrator and other products. Younglimwon soft lab also provides software maintenance services.

YoungLimWon Soft Lab (060850 KS)

Younglimwon Soft Lab IPO Valuation Analysis

We applied a 25% discount to the comps' average P/E ratio of 32.6x to derive our valuation multiple of 24.5x to value this company. Applying our...

Douglas Kim

Younglimwon Soft Lab IPO Preview

A Korean software company called Younglimwon Soft Lab (YSL KS) is getting ready for an IPO in the next few weeks. The IPO price range is from 9,500...

Douglas Kim