Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Established in 2004, E&amp;D Co (Eco &amp; Dream) is an advanced materials company in Korea,  specializing in producing diesel oxidation catalysts, fuel carrying catalysts, and other environment catalysts. E&amp;D Co is getting ready for an IPO on the KOSDAQ exchange in July.This one is a bit interesting and different since it already trades on the microcap KONEX market and is transferring its listing to the KOSDAQ exchange. Currently, E&amp;D Co's share price is at 15,000, which is slightly higher than the high end of the IPO price range of 14,400 won.The bankers used two companies including <a href="https://www.smartkarma.com/entities/sejong-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:7932:1" rel="noopener">Sejong Industrial (033530 KS)</a> and <a href="https://www.smartkarma.com/entities/ecopro-co-ltd" target="_blank" data-smartkarma-citation="entities:19029:1" rel="noopener">Ecopro Co Ltd (086520 KS)</a> as comps to E&amp;D Co. Using their net profit in 2019, the average P/E multiple of the comps in 23.8x. Applying this multiple on E&amp;D Co's net profit of 9.3 billion won in 2019, this results in an implied market cap of 221.5 billion won. After applying an additional IPO discount of 32.5% to 42.1%, this results in an IPO price range of 12,350 won to 14,400 won. The company's sales and profits have been exploding higher in the past year. In 2019, the company generated sales of 58.3 billion won (up 108% YoY), and an operating profit of 9.8 billion won (up 12x YoY). It had its best-ever quarterly results in 1Q 2020 when it posted sales of 25.2 billion won (up 360% YoY) and an operating profit of 5.5 billion won (up from operating profit of only 0.2 billion won in 1Q 2019).

Established in 2004, E&amp;D Co (Eco &amp; Dream) is an advanced materials company in Korea,  specializing in producing diesel oxidation catalysts, fuel carrying catalysts, and other environment catalysts. E&amp;D Co is getting ready for an IPO on the KOSDAQ exchange in July.This one is a bit interesting and different since it already trades on the microcap KONEX market and is transferring its listing to the KOSDAQ exchange. Currently, E&amp;D Co's share price is at 15,000, which is slightly higher than the high end of the IPO price range of 14,400 won.The bankers used two companies including Sejong Industrial (033530 KS) and Ecopro Co Ltd (086520 KS) as comps to E&amp;D Co. Using their net profit in 2019, the average P/E multiple of the comps in 23.8x. Applying this multiple on E&amp;D Co's net profit of 9.3 billion won in 2019, this results in an implied market cap of 221.5 billion won. After applying an additional IPO discount of 32.5% to 42.1%, this results in an IPO price range of 12,350 won to 14,400 won. The company's sales and profits have been exploding higher in the past year. In 2019, the company generated sales of 58.3 billion won (up 108% YoY), and an operating profit of 9.8 billion won (up 12x YoY). It had its best-ever quarterly results in 1Q 2020 when it posted sales of 25.2 billion won (up 360% YoY) and an operating profit of 5.5 billion won (up from operating profit of only 0.2 billion won in 1Q 2019). 

South Korea

E&D Co.,Ltd. operates advanced materials businesses. The Company mainly produces and sells diesel oxidation catalysts, fuel carrying catalysts, and other environment catalysts. E&D conducts business in Korea.

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E&D Co Ltd (101360 KS)

E&D Co IPO Preview

Established in 2004, E&D Co (Eco & Dream) is an advanced materials company in Korea, specializing in producing diesel oxidation catalysts,...

Douglas Kim

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