Timon's 'April Challenge'... Chasing Two Rabbits: IPO and Profitability

Selection of April IPO Underwriters... Accelerating Financial Soundness Improvement for Profitability

[Asia Economy Reporter Kim Cheol-hyun] E-commerce company TMON is set to intensify its challenge next month to achieve two goals: an initial public offering (IPO) and turning a profit. Having sent requests for proposals (RFPs) to multiple domestic securities firms for listing, TMON plans to select an underwriter in April and begin the listing process. Additionally, the company expects to record a monthly profit for the first time in 10 years since its founding in March, and it is anticipated that TMON will tighten financial discipline to maintain this momentum. Industry insiders view TMON’s April challenge as a turning point that will gauge the company’s future growth potential.

According to the e-commerce industry on the 28th, TMON is currently in the process of selecting an underwriting firm. Despite continuous losses, including an operating loss of 127.9 billion KRW in 2018, TMON is reportedly considering the special listing system for growth evaluation (Tesla requirement listing), which allows companies with losses but growth potential to enter the KOSDAQ market. Internally, the target listing date is tentatively set for next year.

Among major e-commerce companies such as Coupang and WEMAKEPRICE, TMON is the first to attempt a listing on the domestic stock market. Since this is a Tesla requirement listing and involves unprecedented valuation issues for an e-commerce company, the selection of the underwriter and subsequent strategy will be key to the listing process. A TMON representative stated, "We are discussing with solid small and medium-sized securities firms rather than large firms," adding, "After selecting the underwriter, we will strategically consider how to assess the company’s value."

To push forward with the listing, TMON is expected to accelerate the performance improvement trend that began at the end of last year. After CEO Lee Jin-won took office in the second half of last year, TMON adopted a strategy to improve its structure through "time commerce," significantly reducing its deficit. The average monthly loss of around 7 billion KRW in the first quarter of last year decreased to about 1 billion KRW in the fourth quarter. In March of this year, TMON is on the verge of recording a monthly profit for the first time. Maintaining this profit trend is TMON’s goal. There is also a sense of crisis that if the company returns to losses after recording monthly profits, all efforts so far could be wasted. Choi Young-jun, TMON’s Chief Financial Officer (CFO), said, "If this trend continues, we expect to achieve an annual profit turnaround this year."

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