Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Simone Acc Collection  / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/simone-accessories-collection-ltd" target="_blank" data-smartkarma-citation="entities:34120:1" rel="noopener">Simone Accessories Collection (381920 KS)</a> is looking to raise up to US$341m in its upcoming South Korea IPO by selling a mix of primary and secondary shares.  </p><p>Simone is a leather accessories manufacturer with a focus on handbags and small leather goods (SLG). The company mainly produces handbags for major American masstige and luxury brands like Michael Kors, Tory Burch and Coach. The company is the leader in the luxury handbag industry with 10% and 30% of global and US market share, respectively, according to Bain’s estimates. It has a long relationship with major masstige and luxury handbag brands and a strong competitive edge over competitors.</p><p>In this note, we look at the company’s fundamentals, operating metrics, and share our thoughts on the deal.</p>

Simone Accessories Collection (381920 KS) is looking to raise up to US$341m in its upcoming South Korea IPO by selling a mix of primary and secondary shares.  Simone is a leather accessories manufacturer with a focus on handbags and small leather goods (SLG). The company mainly produces handbags for major American masstige and luxury brands like Michael Kors, Tory Burch and Coach. The company is the leader in the luxury handbag industry with 10% and 30% of global and US market share, respectively, according to Bain’s estimates. It has a long relationship with major masstige and luxury handbag brands and a strong competitive edge over competitors.In this note, we look at the company’s fundamentals, operating metrics, and share our thoughts on the deal.

Simone Pre-IPO - A Leader in the Industry but Recovery Will Be Slow and Blackstone’s Stake Weighs

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>On 13 September, the <a href="https://finance.naver.com/news/news_read.nhn?article_id=0004604217&amp;office_id=015&amp;mode=LSS2D&amp;type=0&amp;section_id=101&amp;section_id2=258&amp;section_id3=&amp;date=20210913&amp;page=2" target="_blank" rel="noopener">Korea Exchange</a> ruled that starting 1 October, VI (Volatility Mitigation Device) will not be activated for IPOs in Korea in the first day of trading. This has been changed in response to the concerns about the stock prices of IPOs not being able to find its fair value price due to the excessive activation of VI on the first day of listing. Previously listed stocks are not eligible under this ruling. Unlike circuit breakers which apply to the entire market, the volatility mitigation device VI applies for specific stocks. </p><div class="content-highlight"><p>The most likely impact of what is likely to happen once the VI is removed the first day of trading in the Korean IPOs is that it will likely result in higher volatility as well as higher trading volumes in the first day of trading in the Korean IPOs. In addition, it has the potential to help the IPOs to reach their fair values at an accelerated pace as trading these IPOs on the first day no longer involves intermittent pauses of trading due to the activation of VI. </p></div>

On 13 September, the Korea Exchange ruled that starting 1 October, VI (Volatility Mitigation Device) will not be activated for IPOs in Korea in the first day of trading. This has been changed in response to the concerns about the stock prices of IPOs not being able to find its fair value price due to the excessive activation of VI on the first day of listing. Previously listed stocks are not eligible under this ruling. Unlike circuit breakers which apply to the entire market, the volatility mitigation device VI applies for specific stocks. The most likely impact of what is likely to happen once the VI is removed the first day of trading in the Korean IPOs is that it will likely result in higher volatility as well as higher trading volumes in the first day of trading in the Korean IPOs. In addition, it has the potential to help the IPOs to reach their fair values at an accelerated pace as trading these IPOs on the first day no longer involves intermittent pauses of trading due to the activation of VI. 

No More Activation of Volatility Mitigation Device (VI) In the First Day of Trading in Korean IPOs

<p><a href="https://www.kedglobal.com/newsView/ked202102260006" target="_blank" rel="noopener">Simone Acc. Collection</a> is one of the most well known luxury handbag makers in Korea. Established in 1987, Simone is one of the first ODM players in Asia to have tapped into the luxury handbag manufacturing market. In 1987, the founder and chairman Park Eun-Kwan approached Donna Karan New York (DKNY) to win supply rights.</p><p>The company manufactures and sells luxury handbags and small leather goods (SLG)  mainly on ODM/OEM basis. The company has manufacturing operations in Vietnam, Cambodia, and Indonesia, trying to capitalize on lower labor costs and more attractive tariff rates.</p><p><strong>Simone Acc Collection is getting ready to complete its IPO in Korea in October. </strong>The IPO price range is from 39,200 won to 47,900 won. The IPO base deal size is from US$283 million to US$346 million.</p><ul>
<li>According to the bankers' valuation, the expected market cap is from 1.3 trillion won to 1.6 trillion won.</li>
<li>The book building for the institutional investors starts on 24 September. The lead bankers for this deal include Samsung Securities and Mirae Asset Securities. </li>
<li>This is the second attempt for Simone to complete its IPO. The company previously tried to complete its IPO in 2018 but it failed due to weak business performance. </li>
</ul><p><strong>Major shareholders</strong> - Chairman Park Eun-Kwan is the controlling shareholder with a 37.2% stake in the company. His wife Oh In-Shil has a 24% stake in the company. Other insiders and related parties own 8.8%. Blackstone has a 30% stake in the company. </p><table class="table table-striped">
<colgroup>
<col>
<col>
</colgroup>
<tbody>
<tr><td colspan="2"><div>Deal Specifics of Simone Acc Collection Co IPO</div></td></tr>
<tr>
<td>Lead underwriters of the IPO: </td>
<td style="width: 270pt;">Samsung Securities, Mirae Asset Securities, Korea Investment &amp; Securities</td>
</tr>
<tr>
<td>Expected IPO price per share: </td>
<td style="width: 270pt;">39,200 won (low)/47,900 won (high)</td>
</tr>
<tr>
<td>Number of Shares for IPO:</td>
<td style="width: 270pt;">8.37m shares (new shares)</td>
</tr>
<tr>
<td>IPO base deal size: </td>
<td style="width: 270pt;">US$283 mn (low);  US$346mn (high)</td>
</tr>
<tr>
<td>Expected common shares outstanding, fully diluted (post-IPO):  </td>
<td style="width: 270pt;">33.5m shares</td>
</tr>
<tr>
<td>Expected market cap after IPO:</td>
<td style="width: 270pt;">1,313 billion won (low)/1,605 billion won (high)</td>
</tr>
<tr>
<td>Book open: </td>
<td style="text-align: left; width: 270pt;">24-Sep-21</td>
</tr>
<tr>
<td>Book closed:</td>
<td style="text-align: left; width: 270pt;">27-Sep-21</td>
</tr>
<tr>
<td>Listing date: </td>
<td style="text-align: left; width: 270pt;">TBC</td>
</tr>
<tr>
<td>Source: Company data</td>
<td></td>
</tr>
</tbody>
</table>

Simone Acc. Collection is one of the most well known luxury handbag makers in Korea. Established in 1987, Simone is one of the first ODM players in Asia to have tapped into the luxury handbag manufacturing market. In 1987, the founder and chairman Park Eun-Kwan approached Donna Karan New York (DKNY) to win supply rights.The company manufactures and sells luxury handbags and small leather goods (SLG)  mainly on ODM/OEM basis. The company has manufacturing operations in Vietnam, Cambodia, and Indonesia, trying to capitalize on lower labor costs and more attractive tariff rates.Simone Acc Collection is getting ready to complete its IPO in Korea in October. The IPO price range is from 39,200 won to 47,900 won. The IPO base deal size is from US$283 million to US$346 million.
According to the bankers' valuation, the expected market cap is from 1.3 trillion won to 1.6 trillion won.
The book building for the institutional investors starts on 24 September. The lead bankers for this deal include Samsung Securities and Mirae Asset Securities. 
This is the second attempt for Simone to complete its IPO. The company previously tried to complete its IPO in 2018 but it failed due to weak business performance. 
Major shareholders - Chairman Park Eun-Kwan is the controlling shareholder with a 37.2% stake in the company. His wife Oh In-Shil has a 24% stake in the company. Other insiders and related parties own 8.8%. Blackstone has a 30% stake in the company. 





Deal Specifics of Simone Acc Collection Co IPO

Lead underwriters of the IPO: 
Samsung Securities, Mirae Asset Securities, Korea Investment &amp; Securities


Expected IPO price per share: 
39,200 won (low)/47,900 won (high)


Number of Shares for IPO:
8.37m shares (new shares)


IPO base deal size: 
US$283 mn (low);  US$346mn (high)


Expected common shares outstanding, fully diluted (post-IPO):  
33.5m shares


Expected market cap after IPO:
1,313 billion won (low)/1,605 billion won (high)


Book open: 
24-Sep-21


Book closed:
27-Sep-21


Listing date: 
TBC


Source: Company data





Simone Accessories Collection IPO Preview

South Korea

Simone Acc. Collection, Ltd. designs and manufactures handbags. The Company manufactures and markets luxury handbags, masstige handbags, small leather goods, and other products. Simone Acc. Collection markets its products worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Simone Acc Collection (381920 KS)

Simone Pre-IPO - A Leader in the Industry but Recovery Will Be Slow and Blackstone’s Stake Weighs

Simone Accessories Collection (381920 KS) is looking to raise up to US$341m in its upcoming South Korea IPO by selling a mix of primary and...

Sumeet Singh

No More Activation of Volatility Mitigation Device (VI) In the First Day of Trading in Korean IPOs

On 13 September, the Korea Exchange ruled that starting 1 October, VI (Volatility Mitigation Device) will not be activated for IPOs in Korea in the...

Douglas Kim

Simone Accessories Collection IPO Preview

Simone Acc Collection is getting ready to complete its IPO in Korea in October. The IPO price range is from 39,200 won to 47,900 won. The IPO base...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)