Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

A company called <a href="https://www.smartkarma.com/entities/zinus-inc" target="_blank" data-smartkarma-citation="entities:25904:1" rel="noopener">Zinus (013890 KS)</a>whose main business is in making mattresses is getting ready for an IPO in Korea. There have been some delays in the Zinus IPO in the past two years and it appears that the company is finally ready to complete its IPO in the next few weeks. The Zinus IPO is likely to be one of the biggest IPOs in Korea this year and there should be solid interest in this IPO among many institutional investors. The company's mattresses are one of the best-selling items in Amazon's furniture section. The IPO price range is from 80,000 won to 90,000 won. The IPO deal base size is $203 million to $228 million. According to the bankers' valuation, the expected market cap after the IPO is from 1.26 trillion won to 1.41 trillion won. The book-building for institutional shareholders starts on October 16th, 2019. The bankers used four companies including Hyundai Livart, Hanssem, Tempur Sealy International, and Sleep Number Corp as comps to Zinus. The average P/E of the comps is 26.7x. This resulted in the IPO value (pre IPO discount) of 1,742 billion won in market cap or 110,821 won per share. After applying an IPO discount of 18.8% to 27.8%, this resulted in an IPO price range of 80,000 won to 90,000 won per share.

A company called Zinus (013890 KS)whose main business is in making mattresses is getting ready for an IPO in Korea. There have been some delays in the Zinus IPO in the past two years and it appears that the company is finally ready to complete its IPO in the next few weeks. The Zinus IPO is likely to be one of the biggest IPOs in Korea this year and there should be solid interest in this IPO among many institutional investors. The company's mattresses are one of the best-selling items in Amazon's furniture section. The IPO price range is from 80,000 won to 90,000 won. The IPO deal base size is $203 million to $228 million. According to the bankers' valuation, the expected market cap after the IPO is from 1.26 trillion won to 1.41 trillion won. The book-building for institutional shareholders starts on October 16th, 2019. The bankers used four companies including Hyundai Livart, Hanssem, Tempur Sealy International, and Sleep Number Corp as comps to Zinus. The average P/E of the comps is 26.7x. This resulted in the IPO value (pre IPO discount) of 1,742 billion won in market cap or 110,821 won per share. After applying an IPO discount of 18.8% to 27.8%, this resulted in an IPO price range of 80,000 won to 90,000 won per share. 

Zinus IPO Preview - The #1 Player in the Online Mattress Sales in the U.S.

<ul><li>A company called Zinus whose main business is in making mattresses is getting ready for an IPO in Korea. The Zinus IPO is likely to be one of the most anticipated in the Korean market in the next several months (our best guess is in 1H18). The company's mattresses are one of the best-selling items in Amazon's furniture section. Zinus shares are already trading on the K-OTC market. As of September 18th, 2017, Zinus shares were trading at 112,000 won per share on the K-OTC market, which would suggest a market cap of 1.4 trillion won. The company has hired NH Investment &amp; Securities to be its banker to prepare for an IPO. </li><li>Zinus is an amazing comeback story. The company was established in 1979 and it was initially called Jinwoong. The company was listed on KOSPI in 1989. In the 1990s, the company was one of the largest tent manufacturers in the world, selling its product in major outlets such as Walmart. However, the company fell into business difficulties in the late 1990s to early 2000s and it was forced to delist from KOSPI in 2005. Zinus started to invest in the mattress business in 2003 and has made a fantastic comeback with its best-selling mattresses. </li><li>Valuations - With a market cap of 1.4 trillion won in the K-OTC market, using an estimated annualized 2017 net profit of 79 billion won, this suggests a P/E of 18x. The company's two major comps in the US are <a href="https://www.smartkarma.com/entities/7020" target="_blank" data-smartkarma-citation="entities:7020:1">Tempur Sealy International Inc (TPX US)</a> which trades at a P/E of 18x and <a href="https://www.smartkarma.com/entities/14631" target="_blank" data-smartkarma-citation="entities:14631:1">Select Comfort Corporation (SCSS US)</a> which trades at 21x. </li><li>The company has been generating phenomenal growth in sales and profits in the past three years. From 2013 to 2016, its sales increased 40% CAGR and its operating profit jumped 97% CAGR.</li></ul>

A company called Zinus whose main business is in making mattresses is getting ready for an IPO in Korea. The Zinus IPO is likely to be one of the most anticipated in the Korean market in the next several months (our best guess is in 1H18). The company's mattresses are one of the best-selling items in Amazon's furniture section. Zinus shares are already trading on the K-OTC market. As of September 18th, 2017, Zinus shares were trading at 112,000 won per share on the K-OTC market, which would suggest a market cap of 1.4 trillion won. The company has hired NH Investment &amp; Securities to be its banker to prepare for an IPO. Zinus is an amazing comeback story. The company was established in 1979 and it was initially called Jinwoong. The company was listed on KOSPI in 1989. In the 1990s, the company was one of the largest tent manufacturers in the world, selling its product in major outlets such as Walmart. However, the company fell into business difficulties in the late 1990s to early 2000s and it was forced to delist from KOSPI in 2005. Zinus started to invest in the mattress business in 2003 and has made a fantastic comeback with its best-selling mattresses. Valuations - With a market cap of 1.4 trillion won in the K-OTC market, using an estimated annualized 2017 net profit of 79 billion won, this suggests a P/E of 18x. The company's two major comps in the US are Tempur Sealy International Inc (TPX US) which trades at a P/E of 18x and Select Comfort Corporation (SCSS US) which trades at 21x. The company has been generating phenomenal growth in sales and profits in the past three years. From 2013 to 2016, its sales increased 40% CAGR and its operating profit jumped 97% CAGR.

Zinus IPO Preview (Part 1) - An Amazing Comeback Story (#1 Mattress Brand on Amazon)

South Korea

Ace Bed Co., Ltd. manufactures and markets bed mattresses, bed frames, and other wooden furniture.  The Company exports some of its products to Indonesia and China.

Paseco Co., Ltd. manufactures and markets household appliances, such as oil stoves, electric heaters, dishwashers, dish dryers, and refrigerators.

Hyundai Livart Co Ltd designs and manufactures furniture.  The Company produces a variety of furniture, such as bed, chair, desk, and closet used in bedroom, living room, and office.

Topfield Co., Ltd. manufactures digital set top boxes.  The Company's products include free to air receivers, personal video recorders, and common interface receivers.  Topfield provides its products mainly to overseas market.

Iriver Ltd. develops, designs, manufactures, and markets audio equipment, such as MP3 players.  The Company's products include CD type, flash memory type, and hard disk type MP3 players.  In addition, Iriver produces and sells accessories for mobile communication devices.

Thinkware Systems Corp. designs, manufactures, and markets navigational devices. The Company' products include portable navigation devices, hand-held navigation, and navigation software.  Thinkware Systems also provides location based services (LBS) through mobile networks which enables users to identify location of other users and obtain live traffic information, etc.

Anam Electronics Co., Ltd. specializes in manufacturing audio and video products, such as wide screen televisions, video cassette recorders, and DVD players.  The Company also produces digital set-top boxes that receive satellite broadcasting programs.

Shinil Industrial Co., Ltd. manufactures electric fans, ovens, rice pots, small refrigerators, pagers, electric heaters, and other household appliances.

Winix Inc. develops, manufactures, and markets heat exchangers, evaporators, condensers, and air conditioner parts.  The Company also produces water heaters, coolers, purifiers, and dehumidifiers.  Winix supplies its products mainly to appliance manufacturers.

Zaigle Co., Ltd. manufactures household cooking appliance.  The Company's products include oven range, frying pan, and grill.

Sern Kou Resources Berhad is an investment holding company. The Company, through its subsidiaries, manufactures wooden and metal furniture and trades kiln-dried rubber wood.

TOA CORPORATION manufactures and sells sound and information & communication equipment.  The Company's products include loudspeakers, microphones, amplifiers, signal processors, digital mixing systems, and conference systems.

Fuji Corporation Ltd. sells single-family houses and condominiums, primarily in Osaka and Wakayama prefectures. The Company offers real estate management plans for building owners and landholders. Additionally, Fuji operates real estate brokerage and leasing businesses.

Guangdong Anjubao Digital Technology Company Limited researches, designs, produces, sells and provide services on building intercom systems, intelligent home systems and burglar alarm systems.

EG Industries Berhad is an investment holding company. Through its subsidiaries, the Company manufactures and sells individual speaker drivers, speaker systems, and parquet flooring. EG Industries also operates as a subcontractor for the manufacture of speaker systems received on consignment basis.

Anhui Deli Household Glass Co Ltd. manufactures glassware products. The Company supplies various products, mainly with machine blown-molded cups, machine press-molded cups, gift cups with  advertisement, kettles, vases, ashtray, sealed jar, glass bowl, candleholder and plates etc.

Action Electronics Co., Ltd. manufactures and markets high resolution color televisions (TVs) , liquid crystal display (LCD) TVs, video compact disks (VCDs), and mini televisions.  The Company markets its products under the ACTION brand  name.  Action Electronics exports its products to Europe, America, and Asia.

Zeng Hsing Industrial Co., Limited manufactures sewing machines and floor care products.

NACCO Industries, Inc. is an operating holding company. The Company's subsidiaries operate in coal mining and marketing, small electric household appliances, commercial products for restaurants, bars and hotels, and specialty retail of kitchenware and gourmet foods.

Flexsteel Industries, Inc. manufactures and sells wooden and upholstered furniture for the retail, contract, and recreational vehicle (RV) furniture markets. The Company's products are sold to furniture dealers, department stores, and RV manufacturers throughout the United States. Flexsteel also sells its products to several national chains that sell on a private label basis.

Zinus Inc. wholesales and distributes household furniture. The Company wholesales and distributes bed frames, sofas, platform beds, mattresses, and other related products. Zinus markets its products worldwide.

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Zinus (013890 KS)

Zinus IPO Preview - The #1 Player in the Online Mattress Sales in the U.S.

A company called Zinus (013890 KS)whose main business is in making mattresses is getting ready for an IPO in Korea. There have been some delays in...

Douglas Kim

Zinus IPO Preview (Part 1) - An Amazing Comeback Story (#1 Mattress Brand on Amazon)

A company called Zinus whose main business is in making mattresses is getting ready for an IPO in Korea. The Zinus IPO is likely to be one of the...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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