"In this way, public offering is not expensive"... SK Shielders, ahead of IPO, attempts to resolve overvaluation controversy by changing comparison group

“In this way, public offering is not expensive”… SK Shielders, ahead of IPO, attempts to resolve overvaluation controversy by changing comparison group

SK Shields, which is pursuing an initial public offering (IPO) in May, submitted a correction report to change the comparative group from a US security company to a Taiwanese security company. It is interpreted as an attempt to escape from the ‘high valuation controversy’.

On April 21, SK Shielders submitted a correction to the securities report to the Financial Supervisory Service. In the previous report, domestic physical security company ‘S1’ and cyber security company ‘AhnLab’ were selected as comparative companies in the previous report. 6,517.9 billion won)’ and ‘ADT Inc (market capitalization of 7.95 trillion won)’ were selected. They faced criticism that the weight class difference was too large to be compared.

In the revised report, Alarm.com Holdings, Qualys, and ADT Inc were excluded, and domestic companies ‘Cyber ​​One’ and Taiwan’s ‘Taiwan Secom’ were included in the comparative group. The expected offering price is 31,000 won to 38,800 won, the same as before.

In a press release from SK Shielders, SK Shielders said, “SK Shielders is operating in an integrated manner in the core business areas that are rapidly growing, especially the ‘Convergence Security’ and ‘Safety and Care’ business sectors, which have grown at an average annual rate of 90.1% and 68.2%, respectively. There was no company that did this, so there was a limit to finding a suitable overseas comparator.” He explained the reason for the correction.

In particular, regarding the exclusion of American companies, “This correction was made for the purpose of enhancing investor understanding by reorganizing the comparative group focusing on East Asian and domestic companies that are similar to Korea rather than the United States, which have different social and cultural environments,” he said. As a small giant in the cybersecurity industry, SK Shielders has similar characteristics to the business scope,” he added.

However, some argue that it is not enough to completely resolve the controversy over overvaluation by changing the group of comparative companies. This is because AhnLab, which is highly valued as a political theme, remains as it is, and the desired IPO price is the same, so even if calculated based on the lower end of the band, it exceeds the market capitalization of S1, the No. 1 company in the physical security industry of the same type.

SK Shielders conducts demand forecasting for domestic institutional investors for two days from May 3 to 4 to determine the final offering price, and then conducts subscriptions for general investors on the 9th and 10th. The expected listing date is mid-to-late May. The total number of public offerings is 27.1,084 shares, and the expected offering amount is at least 840.2 billion won to 1.51.6 trillion won. Based on the desired IPO price, the expected market capitalization is expected to be at least KRW 2.8 trillion to KRW 3.5 trillion.

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