Korea / Special Situations, Clepsydra Capital

Sanghyun Park

I investigate special situations in Korea.

Korea / Special Situations

Equity Bottom-Up

<ul><li>Thinkware is Korea’s largest vehicle navigation and blackbox device maker with its own brand “i-Navi”. Its market share in the Korea’s vehicle navigator market is estimated at more than 50.0 percent. There is no doubt that Thinkware is the most dominant company in the country’s vehicle navigator and blackbox device market in terms of both technological superiority and brand awareness (marketability).</li><li>Thinkware is expected to generate small profits from its navigation business with its augmented reality feature based premium navigators.  a large portion of its profits will also come from its blackbox business. In 2016 alone, Thinkware is expected to generate operating profits of about KRW10b with about 10 percent operating margin. </li><li>The most important thing about Thinkware is its promising future in the nation's O2O market. As I mentioned earlier, KT and LG Uplus already started utilizing Thinkware's system and database. This is just one example that Thinkware's navigation related assets (system and database) can be used in many new applications whether it is integrated into a third-party service (such as mobile app) or offered separately as a new conceptual service/product. I am confident that this will create a positive market sentiment on Thinkware for years to come.</li><li>I estimate its 2016 EPS at KRW1,012. Based on my estimated 2016 EPS, the company is currently trading at 12M forward P/E multiple of 14.1x with MC of KRW139.3b as of April 8. To me, the company's blackbox business alone (which can consistently generate at least operating profits of KRW10b annually) can justify its current valuation. Now, we can place price premium on Thinkware for its promising future in the nation's O2O market and the overseas vehicle blackbox market.</li><li>The company's stock price took a huge hit in 3Q15 and 4Q15 for its dismal financial performance. But it is slowly recovering. My recommendation is to start having a serious interest in Thinkware if you look for a small but promising tech company.</li></ul>

Thinkware is Korea’s largest vehicle navigation and blackbox device maker with its own brand “i-Navi”. Its market share in the Korea’s vehicle navigator market is estimated at more than 50.0 percent. There is no doubt that Thinkware is the most dominant company in the country’s vehicle navigator and blackbox device market in terms of both technological superiority and brand awareness (marketability).Thinkware is expected to generate small profits from its navigation business with its augmented reality feature based premium navigators.  a large portion of its profits will also come from its blackbox business. In 2016 alone, Thinkware is expected to generate operating profits of about KRW10b with about 10 percent operating margin. The most important thing about Thinkware is its promising future in the nation's O2O market. As I mentioned earlier, KT and LG Uplus already started utilizing Thinkware's system and database. This is just one example that Thinkware's navigation related assets (system and database) can be used in many new applications whether it is integrated into a third-party service (such as mobile app) or offered separately as a new conceptual service/product. I am confident that this will create a positive market sentiment on Thinkware for years to come.I estimate its 2016 EPS at KRW1,012. Based on my estimated 2016 EPS, the company is currently trading at 12M forward P/E multiple of 14.1x with MC of KRW139.3b as of April 8. To me, the company's blackbox business alone (which can consistently generate at least operating profits of KRW10b annually) can justify its current valuation. Now, we can place price premium on Thinkware for its promising future in the nation's O2O market and the overseas vehicle blackbox market.The company's stock price took a huge hit in 3Q15 and 4Q15 for its dismal financial performance. But it is slowly recovering. My recommendation is to start having a serious interest in Thinkware if you look for a small but promising tech company.

씽크웨어에 대한 진지한 관심을 가질 때입니다 - 차량용 블랙박스 및 내비게이터 제작기

Thinkware Systems

씽크웨어에 대한 진지한 관심을 가질 때입니다 - 차량용 블랙박스 및 내비게이터 제작기