MUSINSA Moves Ahead With IPO Despite NTS Investigation; Sono Delayed [fnMarketWatch]

[Financial News] MUSINSA, South Korea’s largest fashion platform, has begun the full-scale process for an initial public offering (IPO) by filing for a preliminary listing review on the Korea Exchange Main Board (KOSPI). The company posted record-high first-half revenue, and its valuation is reportedly being discussed at around 8 trillion won amid strong earnings.
A special tax investigation by the National Tax Service is the biggest variable. Investigation Bureau 4 of the Seoul Regional Tax Office recently launched a special tax investigation into MUSINSA, adding to the uncertainty. The market believes the probe is examining transactions between founder and CEO Cho Man-ho’s private company and MUSINSA, as well as the appropriateness of share collateral. Sono International, which had been preparing for a listing within this year, is facing delays in its exchange review in the aftermath of a tax investigation.
According to investment banking industry sources on the 7th, MUSINSA submitted its application for a preliminary listing review to the Korea Exchange Main Board Division on the afternoon of the same day. Korea Investment & Securities and CitiGroup Global Markets Securities are serving as lead managers, while KB Securities and JPMorgan Chase have been named joint managers. If it passes the preliminary review, MUSINSA plans to pursue a KOSPI listing in the first half of next year after completing the offering process, including filing a securities registration statement and conducting demand forecasting.
MUSINSA began in 2001 as an online footwear community and grew into South Korea’s largest fashion-focused platform. Centered on its online fashion platform, MUSINSA Store, the company operates the women’s fashion-focused platform 29CM and its private-label brand, Musinsa Standard. More recently, it has expanded its business into a comprehensive fashion and retail company by increasing its offline stores and expanding overseas.
Consolidated revenue in the first half of this year reached 821.7 billion won, up 22.5% from the same period a year earlier and the highest first-half figure on record. Consolidated operating profit, however, fell 11.2% to 52.3 billion won, weighed down by higher costs, selling and administrative expenses, and increased global investment. On a standalone basis, revenue rose 30% to 784.7 billion won, while operating profit increased 13.1% to 65.7 billion won. At the end of last year, total assets stood at 2.2865 trillion won and equity at 243.7 billion won.
Overseas operations were the main growth driver. First-half exports surged more than ninefold from a year earlier to approximately 37.2 billion won. MUSINSA plans to focus its IPO proceeds on building global logistics infrastructure and discovering overseas brands.
The market’s attention is focused on the company’s valuation. MUSINSA’s internally calculated valuation is around 10 trillion won, but the company is reportedly expected to target approximately 8 trillion won in the offering process after applying a discount that reflects market conditions and investor protection. As its global business grows, its peer group is expected to consist of overseas fashion and e-commerce companies rather than domestic platforms.
As of the end of June, founder and CEO Cho Man-ho, who also serves as chairman of the board, was the largest shareholder with a 51.8% stake. Including related parties, his stake was 52.4%, securing stable management control. Financial investors reportedly include Sequoia Capital, KKR, IMM Investment, Wellington Management, Korea Development Bank, Anta Sports, and EQT Partners.
[email protected] Kang Gu-gwi Reporter