This article was expressed on Dec. 16, 2024, at 5:25 p.m. on the Chosun Biz Money Move (MM) site.
Meatbox Global, a direct sales platform for agricultural products, has embarked on a second attempt to go public on the KOSDAQ market. It submitted a securities registration statement again after withdrawing its listing due to poor demand forecasting last November.
Meatbox Global has drawn on the price-to-sales ratios (PSR) of 'SiliconTwo' and 'Blue M Tech', arriving at a maximum valuation of 128 billion won. This marks about a 20% decrease compared to the previous valuation. However, the disparity in business areas between comparison companies and controversies surrounding the high valuation associated with PSR remain persistent.
According to the financial investment industry on the 16th, Meatbox Global submitted a securities registration statement to the Financial Services Commission on the 12th and resumed the public offering process for its KOSDAQ listing. It aims to conduct institutional investor demand forecasting starting Jan. 2 and plans to go public next month after a general subscription.
The company previously withdrew its public offering after conducting institutional investor demand forecasting in November. As the operator of the direct sales online platform Meatbox, it aimed to be the first e-commerce company to list, but participation from institutional investors was low, preventing them from filling the public offering.
The number of public offering shares remained at 1 million. Instead, the lead underwriter, Mirae Asset Securities, lowered the hoped-for offering price range from 23,000 to 28,500 won to 19,000 to 23,000 won. Based on the upper limit, the estimated market capitalization after listing reduced from the previous 158.5 billion won to 127.9 billion won, a decrease of 19.3%.
It appears that Meatbox Global believes it has sufficient potential to secure inventory in next year's demand forecasting due to the adjustment in the public offering price. They have already received positive evaluations, citing that they maintained profitability while operating a distribution platform.
Established in 2014, Meatbox Global is an online platform operating in B2B (business-to-business) meat distribution. By eliminating the intermediate distribution process of agricultural products, it attracts the interest of restaurants and butcher shops and has been growing annually. The company successfully turned a profit in 2022, achieving an operating profit of 2.6 billion won last year.
However, the securities industry has expressed the view that this second attempt at listing will not be easy. Meatbox Global has introduced PSR in its valuation, which has been primarily associated with unprofitable growth companies listed like Tesla, often leading to high valuation controversies.
Specifically, Meatbox Global applied a PSR multiplier of 1.83 based on a recent annual revenue of 100.1 billion won for the third quarter, with the specialty cosmetics distribution company SiliconTwo and the pharmaceutical distribution company Blue M Tech, stating an estimated market capitalization of 180 billion won while applying a discount rate of 29.18 to 41.50%.
A securities industry source said, 'PSR is mainly used as an indicator to explain the stock price levels of businesses with high outer growth potential in their early stages, yet posting losses,' adding that 'it reflects growth potential rather than actual profitability, which causes institutional investors to shy away from the metric.'
Notably, the valuation of 127.9 billion won presented by Meatbox Global far exceeds a price-to-earnings ratio (PER) of 46 times, according to calculations. In the public offering market, it is considered challenging to assess a company’s value exceeding 100 billion won based on PER, leading to suggestions that PSR was chosen instead.
Whether comparison companies are accepted is also seen as a key factor. While Meatbox Global is classified under meat wholesale in the Korean Standard Industrial Classification, all meat distribution corporations were excluded from comparison companies. SiliconTwo is a K-beauty export agency, while Blue M Tech distributes specialty pharmaceuticals.
According to the underwriter’s explanation, Meatbox Global excludes publicly listed companies related to meat distribution because it only operates as a distribution platform without processing facilities for meat. However, some have raised concerns that the low PSR of meat distribution companies may have been a consideration.
For instance, Maniker F&N has a market capitalization of around 45 billion won, which is less than half of its revenue. Although Hyundai Corporation Holdings, which has meat wholesale as more than 50% of its total revenue, exceeded 160 billion won in sales last year, its market capitalization fell short of 100 billion won.
Meanwhile, the market is closely watching Meatbox Global's renewed listing efforts. At the end of October, many companies attempting to go public withdrew their registration statements due to a sharp cooling in the public offering market, which was deemed excessively frozen. There are indications that companies like Meatbox Global are attempting to push for a listing again within the six-month approval period for preliminary review.
A representative from an asset management company focusing on public offering investments noted, 'Whether Meatbox Global's demand forecasting will succeed will reveal whether the issues were rooted in the public offering structure itself or merely misfortune due to market stagnation,' adding that 'those companies that chose to withdraw in the second half will inevitably be interested.'