[Click eStock] "Lindemann Asia, Increasing Preference for Unlisted Stocks... Expectation of Revaluation for Listed VC"

Kiwoom Securities Report

[Asia Economy Reporter Minji Lee] Kiwoom Securities stated on the 31st that preference for listed VCs is increasing as an alternative to unlisted stock investment regarding Lindemann Asia, and predicted that a revaluation of the company's value will appear next year.

Lindemann Asia is an independent venture capital (VC) firm that went public in 2018. It has strengths in investing in overseas companies, and as of the third quarter of this year, the company's AUM is 813.5 billion KRW. VC funds account for 326 billion KRW, and PEF funds account for 487.5 billion KRW, making up 60% of total assets. The company's asset management scale has been gradually increasing since the formation of a 75 billion KRW innovation growth private equity fund in August.

Looking at the cumulative results based on the third quarter consolidated financials, operating revenue was 6.8 billion KRW and operating profit was 4.5 billion KRW, increasing by 8.2% and 13.2% respectively compared to the same period last year. The main sources of revenue are management fees charged based on fund size, performance fees issued when exceeding the benchmark rate of return, and investment income according to the proportion of proprietary asset investments.

Lindemann Asia is expected to be revalued next year as an alternative for unlisted stock investment. This year, the initial public offering (IPO) market recorded a boom due to large-scale IPOs and an increase in the proportion of individual investors' stock investments. It is forecasted that the boom will continue next year with a record increase in market standby funds and the promotion of IPOs of large companies. Among investors, there is an observed increase in preference for listed VCs over holding unlisted stocks.

Sangpyo Kim, a researcher at Kiwoom Securities, said, "The proportion of recovery through IPOs (25%) is less than half compared to recovery through off-market sales and redemptions," and added, "It is expected to continue increasing due to the growth of secondary funds and the formation of LP equity liquidity funds."

The value of the company's major investment portfolios such as TmaxSoft, Aprogen, and NFC is also expected to continue increasing during the listing promotion phase.

This year, the average price-earnings ratio of 15 listed VCs was 69.5%, surpassing the KOSDAQ price-earnings ratio of 44.6%. The increase in off-market market capitalization of companies preparing for listing and the expectation of recovery through successful IPOs positively affected the market capitalization of listed VCs.

Researcher Kim said, "Although the company's annual price-earnings ratio was 22.2%, significantly below the average of other peers, increased investment interest in listed VCs as an alternative to unlisted investments and the improvement in the value of unlisted investment companies due to the stock market boom will lead to a revaluation of the company."

This content was produced with the assistance of AI translation services.