Goodai Global and Musinsa, both drawing attention in K-beauty and K-fashion respectively, are pushing to expand their scale to debut on the stock market. If they succeed in expanding their scale, they can apply a high price-earnings ratio (PER) and raise the offering price.
When market sentiment is strong as it has been recently, the price-earnings ratios of peer companies used as a benchmark for setting the offering price also tend to rise. Both Goodai Global and Musinsa expect to be valued at a market cap of 10 trillion won.
According to the industry on the 26th, Goodai Global will hold a competitive presentation (PT) over two days starting that day to select lead underwriters. Major securities firms such as Mirae Asset Securities, NH Investment & Securities, and KB securities are focusing on preparing proposals to lead the listing.
According to the investment banking industry, Goodai Global wants to go public at a level surpassing the market capitalization of APR, which entered the market with K-beauty tech devices. Based on the closing price on the 23rd, APR's market cap is about 10.3 trillion won. An official at a securities firm said, "Goodai Global's desired valuation is around 10 trillion won, and we don't see that as excessive." Goodai Global posted an operating profit of about 130 billion won last year. That is an 89% increase from a year earlier. The view is that if you add up the performance of individual brands and apply the industry's price-earnings ratios, 10 trillion won is reasonable.
With the recent stock market boom, APR's price-earnings ratio is 38 times, and Amorepacific's price-earnings ratio is around 39 times. A securities firm official said, "Given that Goodai Global issued convertible bonds (CB) last year after being recognized at around a 4 trillion won corporate value, it is expected to be easier to be recognized at a 10 trillion won market cap."
Musinsa is also focusing on expanding its scale to be recognized at its target market cap of 10 trillion won. The expansion of Musinsa Standard, Musinsa's private brand (PB), is a prime example. Musinsa Standard's cumulative transaction value last year was around 470 billion won. This year's goal is to reach 1 trillion won in cumulative transaction value. To that end, it plans to aggressively expand its stores. Entry into China is also part of its scale expansion. In Dec., Musinsa Standard opened a store in Shanghai, China.
A securities firm official said, "If manufacturing is involved, expanding scale is easy," adding, "However, it will be more advantageous to reach 10 trillion won if it can apply the average price-earnings ratio of platform companies," and, "To be recognized at a market cap of 10 trillion won, it would need to apply a PER of up to 100 times." However, the average price-earnings ratio of fashion corporations is around 12.6 times, and that of platform companies is around 45 times.