Muristek
One Store, app store by SK Square Co., an investment unit spun off from SK Telecom Co.
One Store Co., a homegrown app store of investment firm SK Square Co., is gearing up for an initial public offering to be held in May. The local app store has proposed a maximum of 1.1 trillion won ($898.8 million) of market capitalization, setting its comparable peer firms as Tencent Holdings Ltd., Naver Corp., Kakao Corp. and The Nexon Co.One Store submitted the IPO application on March 31 and refiled the application last Thursday with some changes in its public offering timeline and the peer group. In the amended application, it delayed the bookbuilding schedule for institutional investors from April 25 and 26 to May 9 and 10. The subscription for retail investors has been rescheduled from May 2 and 3 to May 12 and 13. The supscription for the retail investors will be available via five securities firms -- the two lead managers NH Investment & Securities Co. and KB Securities Co., co-manager SK Securities and the two underwriters, Hana Financial Investment Co. and Daishin Securities Co. In the corrected application, the Korean app store maintained its offering price range between 34,300 and 41,700 won and the number of shares in IPO as 6.6 million. Its market capitalization, based on the offering price band, is between 910 billion and 1.1 trillion won.The app store has estimated its corporate value based on the price-to-sales ratio (P/S ratio). The ratio is calculated by dividing the stock price by the firm’s sales per share and the lower the ratio is, the more undervalued the stock is. The IPO lead managers, said the ratio is appropriate to estimate the corporate value of One Store, of which sales are fast-growing but the operating is at a loss. The company’s annual sales increased from 135.1 billion won in 2019, 155.2 billion won in 2020 to 214.2 billion won in 2021 on a consolidated basis. However, it had operating losses of 5.8 billion won last year due to expanded investment. In the updated application, the app store changed its peer firms from Google's parent company Alphabet Inc. and Apple Inc. to Tencent, Naver, Kakao and Nexon. The new peer group list is more appropriate for its IPO plan, enhancing clarity for notification of the investment risks, a One Store official said. Through a peer group analysis with the new list, One Store applied 7.3 times P/S ratio and up to 41.5% of a discount rate, higher than those of some recent Korean IPOs, to its corporate value estimation.
IPO DEPENDS ON ATTRACTING THE GLOBAL TOP GAMESLaunched in 2016, One Store is putting a strong emphasis on its 20% commissions on apps, which is lower than 30% of Google Play and Apple’s App Store. Boosted by the low commissions, the Korean app store’s average annual growth rate of sales transactions reach 25.9% and 26.7%, respectively. The success of the IPO depends on whether it will ba able to launch upcoming global top games as games are creating the largest sales in the app market. Two main games released last year, Kakao’s Odin: Valhalla Rising and NCSOFT’s Lineage W, didn’t enter One Store but Google Play and App Store. “We are putting efforts in sourcing game apps from around 400 local and overseas game developers, including offering reservations for Diablo Immortal by Blizzard Entertainment Inc., a US top game publisher,” said the One Store official. One Store is planning to use the capital raised via IPO for building its global app market platform. Also, it will inject funds in strengthening the activation of apps on multiple mobile operating systems, securing content intellectual properties, in-app marketing and other promotion businesses.“Besides Google Play and App Store, One Store is the app store with meaningful business size in the global market. We will realize the vision of a global content platform based on multi operating systems with its business capacity that has rapidly expanded over the past six years,” said One Store’s Chief Executive Lee Jae-hwan.By Hyun-Ju Jangblacksea@hankyung.comJihyun Kim edited this article.