Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Battery Technology- The Key To An Electric Vehicle Future

Samsung SDI: Higher Probability of a Partnership with Tesla & Beneficiary of No Chinese EV Subsidy

Panasonic: Freezing Investments in Gigafactory or Freeing Itself from Tesla?

Equity Capital Markets

The institutional investors book building for the <a href="https://www.smartkarma.com/entities/afw-co-ltd" target="_blank" data-smartkarma-citation="entities:28096:1">AFW Co Ltd (312610 KS)</a> IPO will start on June 12th. <a href="https://www.smartkarma.com/entities/28096" target="_blank" data-smartkarma-citation="entities:28096:1">AFW Co Ltd (312610 KS)</a> specializes in making electric vehicle (EV) and industrial equipment components including cathode friction welding (rivet) terminals.Our base case valuation is to use the comps' mid-point EV/EBIT multiple of 14.7x in 2020 and after apply it to our estimated EBIT of 10.7 billion won in 2020, resulting in an EV of 156.7 billion won and implied market cap of 193.6 billion won (adjusting for net cash, including net proceeds from 2.06 million new shares issued in the IPO). This results in an one-year implied price target of 18,757 won, which is 11% below the mid-point of the bankers' IPO price range (21,000 won). As such, we would AVOID this deal since there is further downside risk from the IPO price range.

The institutional investors book building for the AFW Co Ltd (312610 KS) IPO will start on June 12th. AFW Co Ltd (312610 KS) specializes in making electric vehicle (EV) and industrial equipment components including cathode friction welding (rivet) terminals.Our base case valuation is to use the comps' mid-point EV/EBIT multiple of 14.7x in 2020 and after apply it to our estimated EBIT of 10.7 billion won in 2020, resulting in an EV of 156.7 billion won and implied market cap of 193.6 billion won (adjusting for net cash, including net proceeds from 2.06 million new shares issued in the IPO). This results in an one-year implied price target of 18,757 won, which is 11% below the mid-point of the bankers' IPO price range (21,000 won). As such, we would AVOID this deal since there is further downside risk from the IPO price range.  

AFW Co Ltd

AFW Co IPO Valuation Analysis