Korea / Special Situations, Clepsydra Capital

Sanghyun Park

I investigate special situations in Korea.

Korea / Special Situations

Netmarble Games IPO Part 4 - IPO Bookbuilding Results

Netmarble Games IPO Day Recap - Who Are Buying and Who Are Selling

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Netmarble Games IPO Part 2 - Business Structure, Sales Breakdown & Valuation

Netmarble Games IPO Part 1 - Schedule, Financials & Valuation

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Equity Capital Markets

Well, apparently not many investors are questioning whether Netmarble's popularity is for real. That is, (surprisingly) they seem to be accepting Netmarble's suggested valuation. Of course, we had and still have some controversies related to the valuation peers. First and foremost, would Tencent and Netease (particularly Tencent) be a suitable valuation peer for Netmarble? These companies are not only MUCH bigger than Netmarble in terms of sales, but also (and more importantly), Tencent is a very diversified company whose online game sales account only for half of its total sales. Nonetheless, many investors do not seem to bother with this valuation peer controversy. They just appear to be quite excited about Netmarble's growth prospects especially after we have seen L2R's amazing achievements. So, perhaps it'd not be necessary for us to do a valuation assessment. I mean many investors already seem eager to buy Netmarble at the company's indicative price band. However, I decided to do some study on Netmarble's valuation anyway. I just thought it'd still be good to know the company's intrinsic value so that we can have a better understanding of how high it will likely soar after IPO. So, let's dig it out.<div class="content-highlight">Below is the link of the news article about how Netmarble has been received among institutional investors at home and abroad during this early phase.<a href="http://www.thebell.co.kr/front/free/contents/news/article_view.asp?key=201704050100006130000370&amp;svccode=00&amp;page=1" target="_blank">http://www.thebell.co.kr/front/free/contents/news/article_view.asp?key=201704050100006130000370&amp;amp;svccode=00&amp;amp;page=1</a> (Korean language)Following is a brief summary of this news article: Netmarble IPO is in really hot demand. The bookrunners have already reached the target (13.6M shares) even before the official bookbuilding starts. In particular, overseas institutional investors seem to be more excited about this IPO than local institutions. So, there is a good possibility that Netmarble and its bookrunners will allocate more than initially planned to overseas institutions.</div>

Well, apparently not many investors are questioning whether Netmarble's popularity is for real. That is, (surprisingly) they seem to be accepting Netmarble's suggested valuation. Of course, we had and still have some controversies related to the valuation peers. First and foremost, would Tencent and Netease (particularly Tencent) be a suitable valuation peer for Netmarble? These companies are not only MUCH bigger than Netmarble in terms of sales, but also (and more importantly), Tencent is a very diversified company whose online game sales account only for half of its total sales. Nonetheless, many investors do not seem to bother with this valuation peer controversy. They just appear to be quite excited about Netmarble's growth prospects especially after we have seen L2R's amazing achievements. So, perhaps it'd not be necessary for us to do a valuation assessment. I mean many investors already seem eager to buy Netmarble at the company's indicative price band. However, I decided to do some study on Netmarble's valuation anyway. I just thought it'd still be good to know the company's intrinsic value so that we can have a better understanding of how high it will likely soar after IPO. So, let's dig it out.Below is the link of the news article about how Netmarble has been received among institutional investors at home and abroad during this early phase.http://www.thebell.co.kr/front/free/contents/news/article_view.asp?key=201704050100006130000370&amp;amp;svccode=00&amp;amp;page=1 (Korean language)Following is a brief summary of this news article: Netmarble IPO is in really hot demand. The bookrunners have already reached the target (13.6M shares) even before the official bookbuilding starts. In particular, overseas institutional investors seem to be more excited about this IPO than local institutions. So, there is a good possibility that Netmarble and its bookrunners will allocate more than initially planned to overseas institutions.

Netmarble Games IPO パート3 - 評価に関する考察