Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Pumtech Korea Co Ltd / Equity Capital Markets

In this note, we provide a valuation analysis of <a href="https://www.smartkarma.com/entities/pumtech-korea-co-ltd" target="_blank" data-smartkarma-citation="entities:28101:1">Pumtech Korea Co Ltd (251970 KS)</a>, the second largest manufacturer of cosmetics containers in Korea. The institutional investors book building closes on June 19th, 2019. Our base case valuation is 18.9x EV/EBIT using 2019 figures, which is the average EV/EBIT multiple of the comps. Applying 18.9x EV/EBIT to our estimated EBIT of 27.5 billion won in 2019 results in an EV of 519.8 billion won and an implied market cap of 620.8 billion won or 330,232 won per share, which is 30% higher than the mid-point of the IPO price range. Overall, we have a positive view on Pumtech Korea. However, we like other recent IPOs in the pipeline including <a href="https://www.smartkarma.com/entities/segyung-hitech-co-ltd" target="_blank" data-smartkarma-citation="entities:28111:1">Segyung Hitech Co Ltd (148150 KS)</a> and <a href="https://www.smartkarma.com/entities/settlebank-inc" target="_blank" data-smartkarma-citation="entities:28113:1">Settlebank Inc (1370075D KS)</a> more than Pumtech Korea in terms of potential long-term upside and business prospects.Of the 0.64 million shares sold in the IPO, 0.37 million are treasury shares. Although the number of shares sold in the IPO as a percentage of total diluted shares is relatively large, the fact that nearly 58% of this amount is from the treasury shares are likely to be viewed positively since this would not involve shares dilution and the company is unlocking treasury shares to reinvest in the company rather than earn low returns on bank deposits.

In this note, we provide a valuation analysis of Pumtech Korea Co Ltd (251970 KS), the second largest manufacturer of cosmetics containers in Korea. The institutional investors book building closes on June 19th, 2019. Our base case valuation is 18.9x EV/EBIT using 2019 figures, which is the average EV/EBIT multiple of the comps. Applying 18.9x EV/EBIT to our estimated EBIT of 27.5 billion won in 2019 results in an EV of 519.8 billion won and an implied market cap of 620.8 billion won or 330,232 won per share, which is 30% higher than the mid-point of the IPO price range. Overall, we have a positive view on Pumtech Korea. However, we like other recent IPOs in the pipeline including Segyung Hitech Co Ltd (148150 KS) and Settlebank Inc (1370075D KS) more than Pumtech Korea in terms of potential long-term upside and business prospects.Of the 0.64 million shares sold in the IPO, 0.37 million are treasury shares. Although the number of shares sold in the IPO as a percentage of total diluted shares is relatively large, the fact that nearly 58% of this amount is from the treasury shares are likely to be viewed positively since this would not involve shares dilution and the company is unlocking treasury shares to reinvest in the company rather than earn low returns on bank deposits.

South Korea

Yonwoo Co., Ltd. manufactures packaging materials, specializing in cosmetic dispenser pumps and bottles.

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

Yonwoo Co Ltd (115960 KS)

Pumtech Korea IPO Valuation Analysis

In this note, we provide a valuation analysis of Pumtech Korea Co Ltd (251970 KS), the second largest manufacturer of cosmetics containers in...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)