As modular construction startup NRB seeks to enter the KOSDAQ this month, it has presented a valuation of 200 billion won. With an enterprise value (EV) based on target corporate value, the earnings before interest, taxes, depreciation, and amortization (EBITDA) multiple exceeds 16 times, raising interest in how institutional investors will respond during the demand forecast.
According to investment banking (IB) industry sources on the 10th, NRB has initiated the demand forecast for institutional investors from the 8th to the 14th this month, aiming for listing on the KOSDAQ. The listing underwriter is NH Investment & Securities, which is issuing a total of 2.1 million new shares for the offering. The desired offering price is between 18,000 and 21,000 won, with the offering size ranging from 37.8 billion to 44.1 billion won.
Based on the desired offering price, NRB's market capitalization after listing is projected to be between 187.8 billion and 219.1 billion won. Considering last year's operating profit of 6.1 billion won, the price-to-earnings ratio (PER) based on the upper end of the offering price exceeds 35 times. This may be seen as a somewhat challenging valuation in the market.
The background for NRB presenting a valuation around 200 billion won is that it used the EV/EBITDA method for valuing the company. The average EV/EBITDA of SY STEEL TECH, which produces modular materials, and four overseas modular companies with a multiple of 16 was applied. Over the past year, NRB's EBITDA is 21.7 billion won.
An IB industry official noted, "Institutional investors participating in the demand forecast might consider the price somewhat high, but they could still be inclined to subscribe considering supply and demand aspects, especially if they plan to liquidate on the listing day or the following day. However, individual investors considering long-term investments may want to be cautious about subscribing."
NRB is a company established in 2019 by executives from POSCO A&C, focusing on the modular construction sector. Modular construction involves assembling pre-manufactured building materials at the site, which shortens construction time and reduces material waste and byproducts.
NRB secured series A and pre-initial public offering (IPO) investments from venture capital (VC) firms. It raised 10 billion won through series A funding last year and received an investment of 5 billion won from MOBIRIX during the pre-IPO in January. The corporate value recognized at that time was approximately 145 billion won.
The VCs that invested in NRB include four firms: MOBIRIX PARTNERS, ▲Woori Venture Investment Partners, ▲Kolon Investment, and ▲SL Investment. The cumulative investment amount including seed stage investment reaches 26 billion won.
NRB's largest shareholders include CEO Kang Geon-woo (33.27%), Kim Dong-woo (10.73%), and Kang Hye-kyung (4.29%). Their shares will be locked up for a period of 1 year and 6 months to a maximum of 2 years and 6 months after listing. The proportion of shares available for circulation is expected to increase as follows: ▲on the listing day (31.24%), ▲after 1 month (38.52%), ▲after 3 months (46.33%), and ▲after 6 months (49.02%).