Kids animation creator SAMG eyes IPO in H2

South Korea’s SAMG Entertainment Co., a media production firm well known for animation Mini Force, is aiming for listing on the secondary bourse Kosdaq in the second half of 2022.

SAMG has recently filed for preliminary IPO screening with a plan to use Korea’s special listing system with more eased requirements for tech firms, investment banking sources said on Thursday. Several more kids content companies in Korea, including Baby Shark creator Pinkfong Company, are eyeing IPO during the second half of this year.

Founded in 2000, Seoul-based SAMG makes 3D animations for children. It has grown global business capabilities by co-producing Miraculous: Tales of Ladybug & Cat Noir, an adventure animation series that gained huge popularity in Europe and Latin America. Its in-house hero animation Mini Force has been successful in China.

The company enhanced its performance last year as it released Twinkle Catch! Teenieping, an animation series for girls, in July 2021. Based on the success of the animation, SAMG’s annual sales reached 38.4 billion won ($30.8 million) with a 62.9% increase last year. It posted 3.4 billion won in operating gain and 11.1 billion won in a net loss in 2021, which slightly rose from the previous year.

While the IB industry values SAMG at more than 200 billion won, the company aims for more than 300 billion won of corporate value at the timing of IPO, The Korea Economic Daily understood.

SAMG was valued at around 120 billion won when Hong Kong-based private equity firm Excelsior Capital Asia sold the entertainment company’s equities to Korean institutional investors in January. SAMG’s corporate value has doubled since then thanks to fast-growing intellectual property values from the firm’s YouTube channel.

The number of subscribers to SAMG’s YouTube channel exceeded 30 million in late 2021. The Korean media producer operates around 40 channels airing videos on children's education, songs and cartoon character toys. The channels’ cumulative views have surpassed 10 billion.

KIDS CONTENT CREATORS' STRUGGLES IN KOREAN IPO MARKET

However, the firm is facing challenges in IPO as some kids content companies are struggling in the Korean stock market. CarrieSoft Co., the operator of Korean YouTube channel Carrie and Toy Friends, has seen its stock plunge over the past year – the stock price hit a 52-week high of 38,100 won in July 2021 and closed at 8,450 won on Friday. CarrieSoft’s market capitalization is around 60 billion won.  

Baby Shark producer Pinkfong Company also saw its stock previously hit as high as 102,000 won in the over-the-counter market and slide to around 80,000 won last month. Currently, the stock price stays around 97,000 won with the market cap estimated at 1.2 trillion won. However, investors doubt if the company could be valued at more than 1 trillion won at the timing of its IPO later this year.

SAMG is planning to invest in the IP business after listing as well as securing five IPs within two years. The company is intensifying business in toys, performances, games, metaverse and education by using its content and aims to grow as a global kids content platform.

SAMG is set to list 8.92 million shares, including 1.72 million shares for IPO subscription.

The media firm's Founder Kim Su-hoon is the largest shareholder of the company, owning 29.25%. His shareholding rate was 54.05% as of end-2021 but it has decreased via sales of the stock early this year. Some other shareholders include NH Investment & Securities, the lead manager for the IPO, and Korean venture capital firms SangSang Ventures, GAIA Venture Partners and Capital One and investment advisory firm History Investment Management.

Write to Ye-Jin Jun at ace@hankyung.com
Jihyun Kim edited this article.