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

Thoughts on Amazon –What Does Its Valuation Tells Us?

Netflix & Amazon Expand in Korea – Not a Coincidence

Okja: The Fight Between Netflix Vs. CJ CGV

Equity Capital Markets

S.M.Entertainment Co / Equity Capital Markets

Get ready for NCT and the Dream Maker Entertainment IPO! <a href="https://www.smartkarma.com/entities/3500" target="_blank" data-smartkarma-citation="entities:3500">S.M.Entertainment Co</a> is ready to surprise the world with global expansion of NCT which will lead the way for the Dream Maker Entertainment IPO in 4Q16 or 1H17, in our view.Consensus estimates currently forecast CAGR sales growth from 2015 to 2018 of 15.1%, CAGR operating profit growth of 21.3%, and CAGR net income growth of 32.8%. We believe these estimates are reasonable with the expansion of the company's business in China (Dream Maker Entertainment IPO) with new idol groups such as NCT, continued solid progress of its domestic and Japanese businesses, and stabilization of the Won-Yen FX rate. Our base case valuation over a one year period for the company is 65,900 won per share (representing 65% upside from current levels). Our base case valuation is based on 35x P/E, using 2017 consensus net profit estimate of 41 billion won. The P/E of 35x is the average multiple from 2012 to 2016.S.M.Entertainment Co is building NCT which could be the entertainment version of the New York Yankees baseball team. We present seven major reason of why <a href="https://www.smartkarma.com/entities/3500" target="_blank" data-smartkarma-citation="entities:3500">S.M.Entertainment Co</a> is building a powerful business model, somewhat similar to the New York Yankees:<ol><li>An enduring franchise brand</li><li>Multiple expansion of market size</li><li>Minor league and major league system</li><li>Team is more important than individual </li><li>Injuries &amp; military duties</li><li>Try-outs</li><li>Rooting for the home team</li></ol>

Get ready for NCT and the Dream Maker Entertainment IPO! S.M.Entertainment Co is ready to surprise the world with global expansion of NCT which will lead the way for the Dream Maker Entertainment IPO in 4Q16 or 1H17, in our view.Consensus estimates currently forecast CAGR sales growth from 2015 to 2018 of 15.1%, CAGR operating profit growth of 21.3%, and CAGR net income growth of 32.8%. We believe these estimates are reasonable with the expansion of the company's business in China (Dream Maker Entertainment IPO) with new idol groups such as NCT, continued solid progress of its domestic and Japanese businesses, and stabilization of the Won-Yen FX rate. Our base case valuation over a one year period for the company is 65,900 won per share (representing 65% upside from current levels). Our base case valuation is based on 35x P/E, using 2017 consensus net profit estimate of 41 billion won. The P/E of 35x is the average multiple from 2012 to 2016.S.M.Entertainment Co is building NCT which could be the entertainment version of the New York Yankees baseball team. We present seven major reason of why S.M.Entertainment Co is building a powerful business model, somewhat similar to the New York Yankees:An enduring franchise brandMultiple expansion of market sizeMinor league and major league systemTeam is more important than individual Injuries &amp; military dutiesTry-outsRooting for the home team

S.M.Entertainment Co

Dream Maker - Get Ready for NCT!