Millie’s Library Lowers IPO Price Range from Initial Attempt, Reattempts Listing

Increased Applied PER but Lowered IPO Price by Expanding Discount Rate
Eliminated Existing Share Sales and Reduced IPO Shares from 2 Million to 1.5 Million

Millieosjae, the largest domestic reading platform that withdrew its initial public offering (IPO) plan last year due to the contraction of the IPO market, has submitted a securities registration statement to the Financial Services Commission. The company eliminated the sale of existing shares and lowered the offering price to reduce the size of the public offering. The funds raised will be used to invest in content and expand the publishing business. The investment banking (IB) industry views Millieosjae's lowered valuation and the increased interest in small- and mid-sized IPOs this year as factors that make its entry into the domestic stock market highly likely.

According to the Financial Supervisory Service on the 24th, Millieosjae plans to issue 1.5 million new shares as it pursues a listing on KOSDAQ. The expected price range for the public offering is 20,000 to 23,000 KRW per share, with an anticipated fundraising amount of 30 billion to 34.5 billion KRW. The estimated market capitalization is between 162.2 billion and 186.6 billion KRW, subject to change based on the demand forecast results.

Previously, Millieosjae had pursued a listing in the second half of last year but withdrew after conducting a demand forecast. At that time, the proposed price range was 21,500 to 25,000 KRW, and the offering size was 2 million shares, including 1.62 million new shares and 380,000 existing shares.

Mirae Asset Securities, the lead underwriter, applied the price-earnings ratio (PER) valuation method to determine Millieosjae's appropriate corporate value. When pursuing the listing last year, three comparable companies?Kidari Studio, D&C Media, and Mr. Blue?were selected. Applying an average PER of 27.98 times, Millieosjae's appropriate corporate value was estimated at 276.1 billion KRW, with a discount rate of 21.7% to 32.6% applied.

This year, two comparable companies, Mr. Blue and Yes24, were selected. Kidari Studio, which recorded a net loss, and D&C Media, whose PER soared to 56 times, were excluded, and Yes24 was added instead. The average PER of the two comparable companies rose to 30.6 times, higher than the PER applied last year. Considering the disappointment from last year's demand forecast, the discount rate was expanded to 38.2% to 46.2%. Unless the first half of this year's performance significantly exceeds expectations, it would have been difficult to propose a higher price range for the public offering.

Millieosjae recorded sales of 26 billion KRW and operating profit of 5 billion KRW in the first half of this year. Considering last year's sales of 45.8 billion KRW and operating profit of 4.2 billion KRW, profitability has improved. However, it underperformed compared to the performance estimates in the securities registration statement submitted last year. It is estimated to achieve sales of 74.1 billion KRW and operating profit of 12.8 billion KRW this year.

An IB industry official explained, "The fact that the company lowered the expected price range and decided not to sell existing shares indicates a strong intention to list," adding, "The proportion of freely tradable shares immediately after listing was also reduced from the initial 34.83% to 25.07%."

Founded in 2016, Millieosjae is a reading platform company that launched Korea's first monthly subscription e-book service in October 2017. It develops various book-related content such as audiobooks, audio dramas, chatbooks (chat-based reading content), docent books, and object books. In September 2021, Millieosjae was acquired by Genie Music and incorporated into the KT Group.

The company holds approximately 150,000 reading contents and has secured about 1,800 partner publishers, growing into the largest reading platform in Korea. As of last month, it recorded an accumulated subscriber count of approximately 6.4 million.

Millieosjae plans to invest in original intellectual property (IP) acquisition and new businesses after listing. In May, it launched the beta service of the creative platform 'Millie Road' to secure IP and discover writers. About 1,000 works have been serialized within three months of the service launch. Outstanding works discovered through Millie Road will be published as e-books and paper books. Seo Young-taek, CEO of Millieosjae, said, "We will focus on securing original IP," and added, "Through synergy with the KT Group, we will introduce various contents centered on book IP and become a company loved by all generations."

Millieosjae will finalize the public offering price through a demand forecast from the 7th to the 13th of next month. Subscription for general investors will be conducted from the 18th to the 19th of next month.

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