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

Revolve IPO Preview (Part 1): Influence, Rinse, & Repeat

Goldwin Climbs Further in Japan Health and Wellness Boom

A Pair Trade Idea: Long Fila Holdings & Short Acushnet

Equity Capital Markets

<p>Silicon2, a company specializing in K-beauty ("Korean beauty") e-commerce platforms, is trying to complete its IPO in the KOSDAQ market in September. Established in 2001, Silicon2 operates 'stylekorean.com' which is a global online shopping mall that sells beauty products. It sells mostly cosmetics to more than 1 million customers in 100 countries around the world, including North America, Japan, Europe, and Southeast Asia. The company actively uses social media sites such as Facebook, Instagram, and Youtube to advertise and market its products. </p><p>The company is offering 1.65 million shares in this IPO offering. The IPO price range is from 23,800 won to 27,200 won per share. At the high end of the IPO price range, IPO offering will be 45 billion won. According to the bankers' valuation, the expected market cap after the IPO is from 248 billion won to 283 billion won. The book building for the institutional investors starts on 9 September. The lead bankers include Samsung Securities and Mirae Asset Securities.</p><div class="content-highlight"><p>The bankers used three companies including <a href="https://www.smartkarma.com/entities/koreacenter-com-co-ltd" target="_blank" data-smartkarma-citation="entities:28329:1" rel="noopener">Koreacenter.com Co Ltd (290510 KS)</a>, BrandX Corp, and <a href="https://www.smartkarma.com/entities/revolve-group-inc" target="_blank" data-smartkarma-citation="entities:27748:1" rel="noopener">Revolve Group Inc (RVLV US)</a> as comps to value Silicon2 Co. The bankers took the net profit of the comps in 1H 2021 and annualized them to derive an average P/E of 44.7x (taking into account recent prices). The bankers then took the annualized net profit of Silicon2 Co in 1H 2021 and applied P/E of 44.7x to derive an implied market cap of 469 billion won (45,061 won per share), pre IPO discount. <strong>After taking into the IPO discount of 39.6% - 47.2%, the company derived the IPO price range of 23,800 - 27,200 won per share.</strong></p></div>

Silicon2, a company specializing in K-beauty ("Korean beauty") e-commerce platforms, is trying to complete its IPO in the KOSDAQ market in September. Established in 2001, Silicon2 operates 'stylekorean.com' which is a global online shopping mall that sells beauty products. It sells mostly cosmetics to more than 1 million customers in 100 countries around the world, including North America, Japan, Europe, and Southeast Asia. The company actively uses social media sites such as Facebook, Instagram, and Youtube to advertise and market its products. The company is offering 1.65 million shares in this IPO offering. The IPO price range is from 23,800 won to 27,200 won per share. At the high end of the IPO price range, IPO offering will be 45 billion won. According to the bankers' valuation, the expected market cap after the IPO is from 248 billion won to 283 billion won. The book building for the institutional investors starts on 9 September. The lead bankers include Samsung Securities and Mirae Asset Securities.The bankers used three companies including Koreacenter.com Co Ltd (290510 KS), BrandX Corp, and Revolve Group Inc (RVLV US) as comps to value Silicon2 Co. The bankers took the net profit of the comps in 1H 2021 and annualized them to derive an average P/E of 44.7x (taking into account recent prices). The bankers then took the annualized net profit of Silicon2 Co in 1H 2021 and applied P/E of 44.7x to derive an implied market cap of 469 billion won (45,061 won per share), pre IPO discount. After taking into the IPO discount of 39.6% - 47.2%, the company derived the IPO price range of 23,800 - 27,200 won per share.

Silicon2

Silicon2 Co IPO Preview