[IPO Spotlight] Cheongdam Global to Build Logistics Warehouse with IPO Funds

Selected Brand X Corporation and Silicon Two as Comparable Companies
Sales Increased from 27.5 Billion KRW in 2018 to 144.3 Billion KRW... JD.com Sales Account for 74.6%

[Asia Economy Reporter Hyungsoo Park] E-commerce company Cheongdam Global is pursuing a listing on the KOSDAQ market. Due to the sluggish stock prices of comparable companies selected for appropriate corporate value assessment, it is expected to affect the determination of the public offering price. The recent prolongation of China's lockdown measures is also cited as a factor to be examined, given the high proportion of sales in China.

According to the Financial Supervisory Service's electronic disclosure system on the 27th, Cheongdam Global will conduct a demand forecast targeting institutional investors over two days from the 17th to the 18th of next month and finalize the public offering price. The desired public offering price range is 8,400 to 9,600 KRW, with a total of 6,341,686 shares to be offered. Among the total public offering shares, 5,813,212 shares, accounting for 91.7%, are newly issued shares, and the remaining 528,474 shares will be sold as existing shares. The lead underwriter is KB Securities, with Daishin Securities participating as a joint underwriter.

Cheongdam Global sells beauty products such as cosmetics and perfumes to major e-commerce platforms and distributors in China, the United States, Europe, and Southeast Asia. Since its establishment in December 2017, its performance has rapidly increased. Sales, which were 27.5 billion KRW in 2018, rose to 144.3 billion KRW in 2021.

While the global e-commerce market is rapidly growing, Cheongdam Global has focused on China. It operates as a first-tier vendor on China’s JD.com. First-tier vendors not only supply products but also utilize sales analysis data and respond accordingly. Last year, 74.6% of sales were generated from JD.com.

Choi Seok-ju, CEO of Cheongdam Global, said, "Cheongdam Global is a company that provides data-driven total solutions beyond the traditional wholesale and retail framework," adding, "We will continue to grow by establishing a presence not only in China but also in Europe and the United States."

The funds raised through the initial public offering (IPO) will be used for facility and operating expenses. The company plans to secure a warehouse near Incheon Port Coastal Passenger Terminal and expand its facilities. It has set a plan to build a logistics automation system using artificial intelligence (AI) and robots. The remaining funds will be used to purchase cosmetics, infant products, and health functional foods.

To assess Cheongdam Global’s appropriate corporate value, the underwriters selected domestic listed companies Brand X Corporation and Silicon Two as comparable companies. Among overseas companies, Revolve was included, making a total of three companies with an average price-to-earnings ratio (PER) of 30.95 times as the benchmark. The appropriate market capitalization and stock price were calculated at 268 billion KRW and 12,600 KRW, respectively. The underwriters and Cheongdam Global proposed a desired public offering price range of 8,400 to 9,600 KRW, applying a discount rate of 23.9% to 33.4%.

Industry insiders expect that the recent sluggish stock price trends of Brand X Corporation and Silicon Two will affect the subscription for the public offering. Brand X Corporation entered the KOSDAQ market on August 13, 2020, with a public offering price of 13,000 KRW. Through a free share issue, 0.5 new shares were allocated per existing share. Considering the current stock price is below 9,000 KRW, it is similar to the public offering price. Silicon Two was listed on September 29 last year with a public offering price of 27,200 KRW. The current stock price is 16,800 KRW, down about 38.2% from the public offering price.

Among the 21,257,999 shares scheduled for listing, the tradable volume corresponds to approximately 41.35%, or 8,791,212 shares.

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