Korean grocery delivery platform Oasis set for February IPO

South Korean grocery delivery platform Oasis Corp. aims to raise up to $166 million through a listing next month, becoming the country’s first e-commerce company to go public on the local stock market, while chilled investor sentiment has forced other startups to delay their initial public offerings.

Oasis, the only profitable morning food delivery platform in South Korea, on Thursday submitted a securities registration statement to list on the country’s tech-heavy junior bourse Kosdaq in February.

The company is set to raise as much as 206.8 billion won ($166.1 million) by offering 5.24 million shares at a price guidance of between 30,500 won and 39,500 won apiece with an expected market capitalization of up to 1.25 trillion won. In June of last year, Its valuation was estimated at 1.1 trillion won when local retail behemoth E-Land Retail Ltd. invested 33 billion won for a 3% stake.

Oasis is scheduled to hold a bookbuilding for local and global institutional investors on Feb. 7-8 to set the IPO price, followed by a public subscription on Feb. 14-15. Korea Investment & Securities Co. and NH Investment & Securities Co. were selected as the lead managers. 

TO PROCEED DESPITE CHILLED SENTIMENT

That came even after domestic companies that had planned to raise money from the country’s stock markets such as gourmet food delivery platform Kurly Inc. and a major golf course operator Golfzon County Co. postponed listings due to deteriorating investor sentiment.

“Oasis is an unrivaled leader in the dawn food delivery service through its networks, logistics centers and IT logistics solutions,” said Oasis CEO Ahn JunHyung.

“We will become a smart logistics and distribution technology company by expanding our business from early morning delivery to the live commerce, instant delivery and quick commerce sectors.”

Oasis reported an operating profit of 7.7 billion won in the first three quarters of 2022, up 78.4% from a year earlier, as sales rose 19.8% to 311.8 billion won.

ENTERPRISE VALUE-TO-SALES

Oasis calculated its corporate valuation with the enterprise value-to-sales (EV/sales) measure, which is considered more accurate than the price-to-sales (P/S) valuation because the measurement takes into account a company's debt load. The country’s e-commerce giant Coupang Inc. used the P/S valuation when it listed on the New York Stock Exchange in March 2021.

Oasis had more cash and cash equivalents than its financial obligations as of the end of September 2022.

The company also compared valuations of Coupang and overseas major e-commerce companies including MercadoLibre Inc. and Etsy Inc. in the US, as well as Sea Ltd. in Southeast Asia. The average EV/sales multiple of those companies was calculated at 3.77 times.

Based on those measures, Oasis’ corporate value was estimated at 1.62 trillion won. The company discounted the value by 22.7-40.3% to calculate the expected market capitalization.

The company plans to offer 3.67 million new shares, or 70% of the stocks to be offered, and sell 1.57 million existing shares, or the remaining 39%, held by its top shareholder Gaeasoft.

Once the listing is completed, Gaeasoft’s stake is expected to fall to 43.85% from the current 55.17%.

Write to Seok-Cheol Choi at dolsoi@hankyung.com
Jongwoo Cheon edited this article.