IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sanil-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:43687:1" rel="noopener">Sanil Electric (062040 KS)</a>, a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/sanil-electric-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:150440" rel="noopener">Sanil Electric IPO: The Bull Case</a>and <a href="https://www.smartkarma.com/insights/sanil-electric-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:150558" rel="noopener">Sanil Electric IPO: The Bear Case</a>.
</li>
<li>We examine the syndicate's valuation methodology. Our analysis suggests that Sanil is fully valued in the IPO price range. We would pass on the IPO.</li>
</ul>



Sanil Electric (062040 KS), a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.
We previously discussed the IPO in Sanil Electric IPO: The Bull Caseand Sanil Electric IPO: The Bear Case.

We examine the syndicate's valuation methodology. Our analysis suggests that Sanil is fully valued in the IPO price range. We would pass on the IPO.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/sanil-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:43687:1" rel="noopener">Sanil Electric (062040 KS)</a>, a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.</li>
<li>In <a href="https://www.smartkarma.com/insights/sanil-electric-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:150440" rel="noopener">Sanil Electric IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The bear case rests on rapidly slowing growth, high customer concentration, mid-tier revenue growth and mid-tier FCF margin compared to peers.</li>
</ul>



Sanil Electric (062040 KS), a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.
In Sanil Electric IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on rapidly slowing growth, high customer concentration, mid-tier revenue growth and mid-tier FCF margin compared to peers.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/sanil-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:43687:1" rel="noopener">Sanil Electric (062040 KS)</a>, a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.    </li>
<li>The IPO is a pure primary raise of 7.6 million shares at an IPO price range of KRW24,000-30,000. Book building will run from 9 to 15 July.</li>
<li>The bull case rests on US-led rapid revenue growth, high barriers to entry, good revenue visibility, improving margins, top-quartile margin performance and modest leverage.</li>
</ul>



Sanil Electric (062040 KS), a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.    
The IPO is a pure primary raise of 7.6 million shares at an IPO price range of KRW24,000-30,000. Book building will run from 9 to 15 July.
The bull case rests on US-led rapid revenue growth, high barriers to entry, good revenue visibility, improving margins, top-quartile margin performance and modest leverage.


Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>With the development of new and renewable energy, transmission and distribution network bottlenecks are worsening in many countries, and there is a strong demand for new transmission and distribution networks.</li>
<li>China is virtually excluded from competition for the US market. This situation has resulted in increased new orders for companies such as Sanil Electric. </li>
<li>Our base case valuation of Sanil Electric is target price of 58,593 won, which is 95% higher than the high end of the IPO price range (30,000 won).</li>
</ul>


With the development of new and renewable energy, transmission and distribution network bottlenecks are worsening in many countries, and there is a strong demand for new transmission and distribution networks.
China is virtually excluded from competition for the US market. This situation has resulted in increased new orders for companies such as Sanil Electric. 
Our base case valuation of Sanil Electric is target price of 58,593 won, which is 95% higher than the high end of the IPO price range (30,000 won).


<ul>
<li>Our base case valuation of Sanil Electric is market cap of 1.8 trillion won or target price of 58,593 won (95% higher than the high end of the IPO price). </li>
<li>Sanil Electric has higher sales growth, operating margins, and ROE than the comps. </li>
<li>We estimate Sanil Electric to generate sales of 283.4 billion won (up 32.1% YoY) and operating profit of 79 billion won (up 69.6% YoY) in 2024. </li>
</ul>


Our base case valuation of Sanil Electric is market cap of 1.8 trillion won or target price of 58,593 won (95% higher than the high end of the IPO price). 
Sanil Electric has higher sales growth, operating margins, and ROE than the comps. 
We estimate Sanil Electric to generate sales of 283.4 billion won (up 32.1% YoY) and operating profit of 79 billion won (up 69.6% YoY) in 2024. 


South Korea

LS Electric Co., Ltd. manufactures and distributes electrical power equipment. The Company produces smart power equipment, smart automation equipment, smart railway equipment, and other related products. LS Electric also develops smart grid, micro grid, energy storage systems, and metal products.

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LS Electric (010120 KS)

Sanil Electric IPO: Valuation Insights

We examine the syndicate's valuation methodology. Our analysis suggests that Sanil is fully valued in the IPO price range. We would pass on the IPO.

Arun George

Sanil Electric IPO: The Bear Case

The bear case rests on rapidly slowing growth, high customer concentration, mid-tier revenue growth and mid-tier FCF margin compared to peers.

Arun George

Sanil Electric IPO: The Bull Case

The bull case rests on US-led rapid revenue growth, high barriers to entry, good revenue visibility, improving margins, top-quartile margin...

Arun George

Sanil Electric IPO Industry Analysis

With the development of new and renewable energy, transmission and distribution network bottlenecks are worsening in many countries, and there is a...

Douglas Kim

Sanil Electric IPO Valuation Analysis

Our base case valuation of Sanil Electric is market cap of 1.8 trillion won or target price of 58,593 won (95% higher than the high end of the IPO...

Douglas Kim

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