Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Equity Bottom-Up

<ul><li>Gabia (079940) is Korea’s largest web domain and hosting provider. Simply, it can be deemed as Korea’s Go Daddy. Currently, Gabia’s share in the country’s web domain market is about 35.0 percent.</li><li>Gabia is probably the country’s most stable tech company given the nature of its main businesses. The company is a sort of Internet infrastructure company. Web domain and hosting businesses are certainly much less vulnerable to the general state of the economy.</li><li>The market consolidation has been also accelerated with the market having reached a mature stage. The bigger players get bigger because those smaller web domain and hosting companies opt to merge with the bigger players. As a result, Gabia’s so-called cash cow businesses (web domain and hosting) are still expected to grow at about (at least) 8.0 to 10.0 percent annually in the next several years.</li><li>Gabia is providing a relatively simple cloud service package to its enterprise clients. This package includes email, web storage, internal messenger and simple document editing tool. Currently, approximately 270,000 clients use Gabia’s cloud-based enterprise services. Of those 270,000 clients, about 85,000 corporate clients (mostly small and medium sized enterprises) use the company’s more expensive service package called “Hi Works”, which is Amazon-type enterprises solution. Indeed, Gabia’s cloud-based service business is growing at a very fast rate. It now accounts for about 30.0 percent of Gabia’s total revenues.</li><li><strong>Gabia is in a position where it becomes a strategically important business partner for several companies that aim to capitalize on the recent market trends. That is, with such market trends as cloud, IoT (Internet of Things) and overseas direct purchase, several companies in Korea are aiming to become a sort of business-to-business portal. To these companies, web domain and hosting business is certainly regarded as a crucial component for their B2B portal.</strong></li></ul>

Gabia (079940) is Korea’s largest web domain and hosting provider. Simply, it can be deemed as Korea’s Go Daddy. Currently, Gabia’s share in the country’s web domain market is about 35.0 percent.Gabia is probably the country’s most stable tech company given the nature of its main businesses. The company is a sort of Internet infrastructure company. Web domain and hosting businesses are certainly much less vulnerable to the general state of the economy.The market consolidation has been also accelerated with the market having reached a mature stage. The bigger players get bigger because those smaller web domain and hosting companies opt to merge with the bigger players. As a result, Gabia’s so-called cash cow businesses (web domain and hosting) are still expected to grow at about (at least) 8.0 to 10.0 percent annually in the next several years.Gabia is providing a relatively simple cloud service package to its enterprise clients. This package includes email, web storage, internal messenger and simple document editing tool. Currently, approximately 270,000 clients use Gabia’s cloud-based enterprise services. Of those 270,000 clients, about 85,000 corporate clients (mostly small and medium sized enterprises) use the company’s more expensive service package called “Hi Works”, which is Amazon-type enterprises solution. Indeed, Gabia’s cloud-based service business is growing at a very fast rate. It now accounts for about 30.0 percent of Gabia’s total revenues.Gabia is in a position where it becomes a strategically important business partner for several companies that aim to capitalize on the recent market trends. That is, with such market trends as cloud, IoT (Internet of Things) and overseas direct purchase, several companies in Korea are aiming to become a sort of business-to-business portal. To these companies, web domain and hosting business is certainly regarded as a crucial component for their B2B portal.

Gabia (079940): Go Daddy of Korea Is Still Growing and Also Becoming a Strategic Important Player

Gabia Inc

Gabia (079940): Go Daddy of Korea Is Still Growing and Also Becoming a Strategic Important Player