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Enterprise value

Travel platform Yanolja’s enterprise value seen at $11 bn if listed on Nasdaq

Mar 02, 2021 (Gmt+09:00)

Travel platform Yanolja’s enterprise value seen at  bn if listed on Nasdaq

South Korea’s largest travel platform Yanolja’s enterprise value could rise to at least $11 billion if the stock is listed on the Nasdaq, given its growth potential.

Yanolja, which is considering going public by the end of 2021, is getting interest from analysts over how to value the Korean startup, which is currently losing money from its business operations.

Industry officials said the price-to-sales ratio (PSR) could be a good yardstick to measure the enterprise value of companies like Yanolja, which are unprofitable but promising.

PSR is a valuation metric for stocks, calculated by dividing the company’s market capitalization by the revenue in the most recent year; or equivalently, divide the per-share stock price by the per-share revenue.

Some analysts liken Yanolja to global online booking platform Airbnb, which saw its market capitalization rise to over 100 trillion won ($89.4 billion) upon listing on the Nasdaq in late 2020. Airbnb’s stock has since risen further, with its total market cap now hovering around 130 trillion won.

Yanolja’s two other global peers, Booking.com and Expedia, also saw their share prices rise 20-30% in the past month, boosted by their growth potential.

PRICE-TO-SALES RATIO MULTIPLE

Some analysts say a PSR multiple of 10 can be applied to Yanolja considering the company’s estimated 2020 revenue of 300 billion won to 500 billion won, which could value the startup at as much as 5 trillion won.

Given that the valuations of global online travel platforms keep rising, boosting their PSR multiples accordingly, industry officials say Yanolja could also have a PSR above 10, making it a company with a higher enterprise value.

Airbnb’s PSR is currently hovering around 33 to 34 times, with Expedia’s ratio moving at 4 to 5 times and Booking.com at 12-13 times.

In 2020, Airbnb posted $3.4 billion in revenue, down about 30% from $4.7 billion the previous year.

By contrast, Yanolja’s 2020 revenue is estimated at over 300 billion won, up from 245 billion won in 2019. Its revenue has steadily increased, doubling every year since 2017.

Travel platform Yanolja’s enterprise value seen at  bn if listed on Nasdaq

If Yanolja, with revenue one-tenth that of Airbnb's, decides to list on the Nasdaq, its corporate value may be assessed in similar proportions at around 13 trillion won ($11.6 billion), according to industry officials.

The enterprise value of Coupang Corp., a South Korean online retailer that is set to list on the New York Stock Exchange, is seen at 50 trillion won with a PSR multiple of 4, applied to its global peers Amazon.com and eBay. Coupang posted 13 trillion won in revenue in 2020.

TOP PMS PLAYER WITHIN 3 YEARS

According to the investment banking industry on Mar. 2, Yanolja is looking to have its initial public offering plans reviewed by regulators in the second quarter and make a trading debut on the local bourse by year-end.

Yanolja is known to be considering listing its shares on the tech-heavy Kosdaq market by means of the so-called “Tesla rules,” loosened IPO regulations the Korean government introduced last year to help technology startups go public with ease.

But a Yanolja official said the company “does not completely rule out the possibility of debuting on other markets.”

The Korean travel platform aims to strengthen its hotel management system (PMS) as a new revenue growth driver.

The PMS is a set of solutions that hoteliers use to manage their day-to-day operations activities such as reservations, front desk, housekeeping, maintenance, billing and invoicing.

“Yanolja is posting rapid growth in its PMS business and could emerge as the top global player within three years,” said an industry official.

Write to Jong-Woo Kim at jongwoo@hankyung.com

In-Soo Nam edited this article.

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