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

Dreamtech: Trying for an IPO Again at a Lower Price

End of Mandatory Lock-Up Periods for 35 Companies in Korea in March 2023

Equity Capital Markets

Dreamtech Co Ltd / Equity Capital Markets

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/27531" target="_blank" data-smartkarma-citation="entities:27531:1">Dreamtech Co Ltd (192650 KS)</a></strong> is an IPO in Korea which is expected to be completed in November 2018. Established in 1988, <strong>Dreamtech makes modules and sensors for smartphones, auto vehicles, home appliances, and health care products.</strong> The IPO price range is between 13,400 won to 16,700 won. The company is expected to raise between US$76 million to US$94 million in this IPO.</li>
<li>The bankers used 20 companies including SEMCO, SimmTech, and Rayence as comparable companies to Dreamtech. This is a bit unusual since the bankers typically use only about three to six companies as comparables. The average P/E of the comps is 19.3x (based on the annualized net profit in 1H18). The bankers then took the annualized net profit of Dreamtech in 1H18 and applied this P/E multiple which resulted in an implied market cap of 657.9 billion won or implied price of 20,032 won. After applying additional 16.6% to 33.1% IPO discount, this resulted in the IPO price range of 13,400 won to 16,700 won.</li>
<li>The company has a record of sporadic sales and profits growth in the past several years. For example, the company's sales declined 22.5% YoY in 2015 but increased strongly in 2016 and 2017. Its sales declined slightly by 2.5% YoY in 1H18. </li>
</ul>



Dreamtech Co Ltd (192650 KS) is an IPO in Korea which is expected to be completed in November 2018. Established in 1988, Dreamtech makes modules and sensors for smartphones, auto vehicles, home appliances, and health care products. The IPO price range is between 13,400 won to 16,700 won. The company is expected to raise between US$76 million to US$94 million in this IPO.
The bankers used 20 companies including SEMCO, SimmTech, and Rayence as comparable companies to Dreamtech. This is a bit unusual since the bankers typically use only about three to six companies as comparables. The average P/E of the comps is 19.3x (based on the annualized net profit in 1H18). The bankers then took the annualized net profit of Dreamtech in 1H18 and applied this P/E multiple which resulted in an implied market cap of 657.9 billion won or implied price of 20,032 won. After applying additional 16.6% to 33.1% IPO discount, this resulted in the IPO price range of 13,400 won to 16,700 won.
The company has a record of sporadic sales and profits growth in the past several years. For example, the company's sales declined 22.5% YoY in 2015 but increased strongly in 2016 and 2017. Its sales declined slightly by 2.5% YoY in 1H18. 


Dreamtech Co Ltd

Dreamtech IPO Preview (Part 1)