이 기사는 2022년 04월 06일 08:05 thebell 에 표출된 기사입니다.

South Korea's security service provider SK shieldus is trying to emphasize its push into new growth businesses ahead of its planned initial public offering (IPO) in May.

SK shieldus plans to set its IPO price based on the results from its bookbuilding process slated for May 3 and 4. SK shieldus has proposed a IPO price band of 31,000 won ($25.55) to 38,800 won. NH Investment & Securities, Morgan Stanley and Credit Suisse are managing the deal.

To set its IPO price at the top end of the band, SK shieldus has to convince the market participants about the growth potential of its business model. SK shieldus operates four businesses: physical security, cyber security, converged security and safe & care (S&C).

Among the four business areas, SK shieldus is heavily reliant on the physical security business, which recorded revenue of 917 billion won, or 59.2% of the company’s total revenue of 1.55 trillion won in 2021 on a consolidated basis.

The proportion of physical security business of the total revenue, however, has been reduced over the past year from 66.1% in 2020.

SK shieldus has selected S-1 and ADT as comparable companies for its physical security business. The average multiple for the same business area calculated based on the companies’ enterprise value/earnings before interest, taxes, depreciation and amortization (EV/EBITDA) was 7.09 times.

SK shieldus has chosen Alarm.com as its peer company for its converged security and S&C businesses, which had an EV/EBITDA multiple of 28.31 times. The company selected Qualys and Ahnlab as comparable companies for the cyber security and used an EV/EBITDA multiple of 30.05 times.

Expectations on new businesses

To be valued higher, SK shieldus has painted a rosy outlook for its new growth businesses, citing Infiniti Research’s market research report.

The global cyber security market is predicted to reach $6.9 billion by 2025 from $4.1 billion in 2020 and exhibit a compound annual growth rate (CAGR) of 13.2% during the forecast period. Particularly, the cloud security is showing a CAGR of 32.5% each year.

The converged security market size was $795 million in 2020, but it is estimated to grow at an annual average rate of 26.8% to reach $1.86 billion in 2025.

The South Korean smart home safety market is expected to show the fastest growth at an annual average rate of 97.7% and the domestic senior care market is estimated to grow at a rate of 69.5% annually.

A combined size of domestic smart home safety, unmanned parking, quarantine business, unmanned stores and senior care markets amounted to $2.9 billion in 2020, but it is expected to grow rapidly to reach $30.5 billion by 2025.

Excluding the physical security market – which is estimated to grow at an annual rate of 4.1% by 2025 – the markets for SK shieldus’ new businesses are expected to show double-digit growth every year. The proportion of physical security in the entire security market is expected to reduce to 26.1% in 2025 from 41.1% in 2020. (Reporting by Jang-jun Lee)