Yahoo Finance IPO Watch: 3 High-Growth Companies Going Public or Recently Listed
In the wake of successful initial public offerings (IPOs) of high-profile companies recently, like Arm (NASDAQ: ARM) and Reddit (NYSE: RDDT), investors are on the prowl for the next success story.
Reddit has grown impressively since its IPO on 22 March 2024, nearly doubling from its IPO price of US$34.
Similarly, Arm has skyrocketed from its IPO price of US$51 to over US$160 in less than a year.
Here are some reputable companies going public or currently in the process of applying for an IPO.
Webtoon Entertainment (NASDAQ: WBTN)
Owned by South Korea’s internet giant Naver Corporation (KRX: 035420), Webtoon Entertainment is one of the world’s largest platforms for online stories and comics.
Webtoon owns flagship brands such as Webtoon and Naver Webtoon for global audiences and Korean users, respectively, and also other brands such as Wattpad and Line Manga.
Currently, the company boasts over 24 million creators and around 170 million active monthly users across its many platforms.
Notable series include “Lookism” which has nearly 870 million readers and an animated version on Netflix (NASDAQ: NFLX), ranking as a Netflix top 10 series in December 2022.
Another popular series, “True Beauty”, has amassed over 6.4 billion page views and is available on Apple TV, Prime Video and Netflix.
Webtoon Entertainment generates revenue through advertising, paid subscriptions and licensing agreements.
For 2023, Webtoon Entertainment recorded US$1.3 billion in revenue, marking a significant 18% year on year increase.
Despite this, the company was not profitable for the last two fiscal years.
However, in the first quarter of fiscal year 2024 (1Q 2024), Webtoon Entertainment was able to generate a net profit of US$6.2 million.
Webtoon Entertainment has not generated free cash flow yet.
Despite this, as a Software as a Service company (SaaS), free cash flow will not be an issue for Webtoon Entertainment in the future.
SaaS companies operate with a subscription model, providing regular and predictable revenue streams.
Additionally, scaling, the act of acquiring additional users, is relatively cheaper compared to traditional businesses once the platform is built.
Combined with low capital expenditures, this enables SaaS companies to generate free cash flow easily.
Despite this, Webtoon Entertainment does not plan to declare dividends in the foreseeable future, opting instead to reinvest its earnings.
Webtoon Entertainment is set to debut on the NASDAQ Stock Exchange, offering 15 million shares at an IPO price ranging from US$18 to US$21 a share.
The listing took place on 27 June 2024 and the company is now trading under the ticker “WBTN”.
SHEIN Group
Headquartered in Singapore, Shein is one of the biggest players in the fast and affordable fashion industry.
Founded in 2012, Shein has cultivated a successful international presence, operating and serving customers in over 150 countries.
Shein is the most downloaded shopping mobile application for clothing in the US, outperforming other clothing brands such as H&M and ASOS.
According to a research conducted by money.co.uk, Shein was the most googled fashion brand in 2022.
The fast fashion retailer was the most searched brand in 113 countries, surpassing other companies like Zara and Zalando (ETR: ZAL).
With such a large market share, it has been estimated that Shein generates an annual revenue of over US$30 billion, as well as more than US$2 billion in profits.
According to the Financial Times, Shein is targeting US$58.5 billion in annual revenue by 2025, citing Shein’s management presentation.
As of now, Shein is eyeing an IPO in London, at a valuation of around US$63 billion.
However, there has not been an announcement of the exact date Shein will go public.
Guzman y Gomez (ASX: GYG)
Guzman y Gomez (GYG), the Mexican food chain well-known to Singaporeans, has gone public recently.
Founded in Sydney in 2006, GYG now operates over 200 outlets in Australia, Singapore, Japan and the United States.
The casual Mexican eatery aims to open 40 new restaurants yearly.
The company was listed on 20 June 2024 on the Australian Stock Exchange (ASX).
For 2023, GYG reported a total revenue of A$759 million.
The company’s revenue has been increasing at a compound annual growth rate (CAGR) of 29% since 2015.
GYG is valued at A$2.2 billion based on its IPO price of A$22, which is approximately US$1.5 billion.
Initially, the company planned to raise A$242.5 million, but this amount was later then increased to A$335.1 million.
The majority of the money raised will be used to fund GYG’s expansion plan, which includes opening more outlets in Australia.
However, Singaporeans might face difficulties investing in the Australian Stock Market.
There are a few brokers which facilitate this, such as Tiger Brokers from UP Fintech Holding Ltd (NASDAQ: TIGR).
Our broker guide can help you to identify the right brokers that serve the Australian market.
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Disclosure: Aw Kai Rui does not own any of the stocks and ETFs mentioned in this article.
The post IPO Watch: 3 High-Growth Companies Going Public or Recently Listed appeared first on The Smart Investor.
