This article was published on April 23, 2025, at 2:35 p.m. on the ChosunBiz MoneyMove site.
Sonoh International, the holding company of Daemyung Sonogroup, is expected to submit a preliminary listing application to the Korea Exchange as early as June, with market interest focused on how much the company will present its corporate value.
Sonoh International reportedly recognized a corporate value of about 4 trillion won (before discounts) when it attracted pre-IPO investments in February. However, this value was based on last year's performance. When it submits its securities registration statement in the second half of this year and presents the desired offering price, it is expected that the corporate value will need to be recalculated based on the first half's results, and whether to reflect the performance of T'way Air, which is currently undergoing acquisition procedures, is a matter of internal debate within the company.
According to investment banking (IB) industry sources on the 23rd, Sonoh International plans to apply for a listing preliminary review with the Exchange's securities market headquarters as early as June. There are also expectations that it could use the fast-track system that exempts 'corporate continuity' reviews for strong corporations, but the company noted, "While we meet the qualification requirements, we have not yet decided whether to apply for the fast track."
To receive a fast-track review for listing, a company must meet requirements such as over 400 billion won in equity, over 700 billion won in revenue, and over 30 billion won in pre-tax profit. Sonoh International easily surpasses these thresholds. Using the fast track can shorten the listing preliminary review period from 45 days to 20 days.
If Sonoh International submits its listing preliminary review application in early June and utilizes the fast track, it is technically possible to submit its securities registration statement in July, but realistically it is expected to be submitted in August or September. Regardless, it is anticipated that the submission of the securities registration statement will reflect the results of the second half of last year and the first half of this year.
Industry sources have indicated that Sonoh International has posted strong results in the first quarter. Last year, its annual revenue and operating profit were 973.4 billion won and 208 billion won, respectively, and if the positive trend in the first-quarter results continues into the second quarter, it is expected to surpass last year's performance.
The key factor is T'way Air. Currently, Sonoh International is undergoing a corporate merger review with T'way Air. Initially, the plan was to secure approval by March 31 and finalize the entry of Chairman Seo Jun-hyuk of Daemyung Sonogroup onto the board, but the delay in approval has slowed the overall schedule.
Once the corporate merger is completed and T'way Air is integrated into Sonoh International, the performance of T'way Air is expected to be reflected in Sonoh International's consolidated results starting from the merger date.
At this point, with less than two and a half months left in the first half of the year, even if the Fair Trade Commission's approval for the corporate merger is granted right now, the impact of T'way Air's performance on Sonoh International's consolidated results is expected to be minimal. Nevertheless, Sonoh International is in discussions over whether to incorporate T'way Air's results into its corporate value assessment due to the significant drop in quarterly profits for low-cost carriers (LCCs) amid the aftermath of the Jeju Air Muan Airport disaster last year.
An IB industry source said, "If T'way Air's acquisition is reflected, the asset size would increase significantly, so it would be reasonable for Sonoh International's corporate value to rise, but it would negatively affect profitability," adding, "It can only be burdensome."
In fact, Sonoh International attracted 410 billion won in pre-IPO investments in February, and at that time, it was valued at 4 trillion won based on Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). Initially, the company planned to receive 300 billion won from our investment securities through exchange bonds and 200 billion won from DB Financial Investment via short-term electronic bonds, but ultimately the investment from Woori Investment & Securities was finalized at 210 billion won.
Since the corporate value assessment at that time was based on EBITDA, if the incorporation of T'way Air leads to a reduction in consolidated operating profit, Sonoh International will inevitably incur losses.
If Sonoh International is valued at 4 trillion won, the offering size is projected to reach between 700 billion and 800 billion won. If the IPO process proceeds smoothly as planned, it is likely to become one of the 'biggest catches' in the second half of this year.