Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 25 years of experience in analyzing hundreds of companies, especially in Asia. Deep expertise in the following sectors:
- Technology (E-commerce, SaaS, Internet)
- Consumer 
- Special Situations/Deep Value Plays
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

SD Biosensor IPO: Improving Investor Sentiment & Valuation Rerating

SD Biosensor Bookbuilding Results: The First Case of Disclosing Lockup Info in Detail

SD Biosensor IPO: Offering Detail, Valuation Issue, & Index Fast Entry Possibilities

Equity Capital Markets

<div class="content-highlight">
<h2>Revised IPO Price Range and Methodology by the Bankers</h2>
<p>On 11 June, SD Biosensor announced that it will drastically lower the IPO price range to 45,000 won to 52,000 won, down from 66,000 won to 85,000 won previously, representing a reduction in prices by 32% to 39%. As a result of this change, the IPO price range will be reduced from the high end price level of 8.8 trillion won to 4.6 trillion won to 5.3 trillion won. In terms of the key IPO dates, the bookbuilding for the institional investors will start on July 5th. </p>
<p>Despite the lower IPO price levels, we would continue to pass on this IPO deal. If we just take the P/E of the four Korean comps that the bankers used, that would be 9.8x. If we take this multiple and apply it to our estimated net profit of 560 billion won in 2022, that would suggest 5.5 trillion won in implied market cap or target price of 53,350 won. At this price, it would not suggest much upside from the IPO price range. Plus, at this price, it is highly unlikely for the company to be included in the KOSPI 200 Fast Entry.</p>
</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/212/860/original/image_81501406031623646972806.png?1623618124" class="editor-image img-responsive" data-smartkarma-image-id="212860"></figure>


Revised IPO Price Range and Methodology by the Bankers
On 11 June, SD Biosensor announced that it will drastically lower the IPO price range to 45,000 won to 52,000 won, down from 66,000 won to 85,000 won previously, representing a reduction in prices by 32% to 39%. As a result of this change, the IPO price range will be reduced from the high end price level of 8.8 trillion won to 4.6 trillion won to 5.3 trillion won. In terms of the key IPO dates, the bookbuilding for the institional investors will start on July 5th. 
Despite the lower IPO price levels, we would continue to pass on this IPO deal. If we just take the P/E of the four Korean comps that the bankers used, that would be 9.8x. If we take this multiple and apply it to our estimated net profit of 560 billion won in 2022, that would suggest 5.5 trillion won in implied market cap or target price of 53,350 won. At this price, it would not suggest much upside from the IPO price range. Plus, at this price, it is highly unlikely for the company to be included in the KOSPI 200 Fast Entry.


SD Biosensor

SD Biosensor Reduces IPO Price Range