Korea’s IPO market gains momentum

Dongbang Medical CI

About 20 companies are scheduled to hold bookbuilding and public subscription sessions until the end of October as South Korea’s initial public offering (IPO) market heats up.

Among them, businesses with distinctive and uncommon models are catching the eyes of investors.

One of these companies is Dongbang Medical, founded in 1985, which recently filed its securities registration statement for a listing on the secondary Kosdaq market.

Dongbang Medical dominates the domestic market for disposable acupuncture needles and cupping therapy cups.

Since 2016, the company has expanded into the aesthetic medical industry, including dermal fillers. Acupuncture needles accounted for about 30 percent of its entire sales as of the first half of this year, while filler sales contributed around 22 percent.

In 2023, Dongbang Medical posted 90.9 billion won ($68.4 million) in revenue and 16.5 billion won in operating profit.

The company’s market valuation, based on an average EV/EBITDA ratio of 16.37, is estimated at about 312.3 billion won. The selected comparable companies for calculating the appropriate market capitalization are BioPlus (EV/EBITDA 21.36x), Humedix (4.57x), Caregen (24.55x), and BNC Korea (15.01x).

The funds raised through the IPO are earmarked for expanding the company’s subsidiary in Indonesia and establishing a joint venture in Brazil.

Knowmerce, a 2019-founded artist intellectual property (IP) platform, also submitted its securities registration statement around the same time.

Known for operating the online store Fromm Store, Knowmerce sells artist-related merchandise, message subscription rights, and albums.

Despite reporting an operating loss of 200 million won over sales of 42.3 billion won last year, the company swung to a profit in the first half of 2024, with an operating income of 3 billion won.

Knowmerce expects a post-IPO market capitalization of between 302.7 billion and 336.1 billion won, with peer comparisons including JYP Entertainment, SM Entertainment, YG PLUS, and DEARU.

Dotmill, a specialist in immersive content founded in 2015, also filed for its IPO on September 11. The company has been involved in high-profile projects such as the PyeongChang Olympics ceremonies and BTS hologram performances.

Dotmill opened the immersive media theme park Water World in Jeju’s Seogwipo in July and is seeking to go public under a special requirement.

Instead of projected figures, Dotmill’s valuation will be based on its price-to-sales ratio (PSR) calculated from its cumulative revenue over the last four quarters.