RaonSecure Raises Funds Through CB to Strengthen R&D Investment
Developing Technology Aligned with Simple Authentication Trends... Maintaining Sales Growth Momentum
Win-Win for Companies and Investors... Key to Resolving Overhang Burden
[Asia Economy Reporter Park Hyungsoo] The conversion period for the convertible bonds (CB) issued by RaonSecure last year is approaching in one month. If RaonSecure maintains its current stock price level, investors who invested in the convertible bonds are expected to request conversion.
According to the Financial Supervisory Service on the 21st, RaonSecure issued convertible bonds worth 18 billion KRW through a private placement last August to raise operating funds. The convertible bonds were invested in by investment associations such as the KOSDAQ Scale-up Fund, Smilegate Investment, and SBI Investment.
At the time of issuance, both the nominal interest rate and maturity interest rate were 0%. The intention was to convert to common stock when the stock price rises to gain capital gains. The conversion price is 2,785 KRW, and conversion can be made between August 28 and July 28, 2022. The conversion price can be adjusted up to 70%. After one adjustment, the conversion price was lowered to 2,625 KRW. The number of convertible shares increased from 6.46 million to 6.86 million shares. This accounts for more than 21% of the total issued shares. RaonSecure holds a call option on 35% of the convertible bond issuance amount, so it is expected that these shares will not be sold on the market in the short term.
RaonSecure's current stock price is 4,065 KRW, more than 50% higher than the conversion price. With about a month left until the conversion period, investors are expecting an exit through conversion. However, if conversion requests flood in at once, there is concern that large-scale sell-offs could disrupt the realization of profits.
In March, when the domestic stock market plunged due to the impact of the novel coronavirus (COVID-19), RaonSecure's stock price fell to 1,300 KRW. Since then, as the stock market rebounded, RaonSecure's stock price surged more than 200%, being recognized as a beneficiary of the abolition of the public certification system.
RaonSecure is a growing company based on mobile biometric security technology. It was the first in Korea to supply the FIDO (Fast IDentity Online) biometric authentication platform technology and has secured the largest number of biometric authentication implementation cases domestically. It developed an identity verification platform using blockchain-based decentralized identity (DID). It possesses next-generation integrated biometric authentication technology that does not require a public certification.
As of last year, the sales composition was 42.5% mobile security, 16.6% PC security, 9.0% integrated access management, and 28.6% other solutions. It has secured over 500 corporate clients, including financial institutions and public organizations.
Researcher Kim Jaehoon of Mirae Asset Securities explained, "With the passage of the bill abolishing the exclusive use of public certification in the National Assembly, biometric authentication technology and related security technologies will become more important. Banks that relied on public certification need authentication technology that combines convenience and security."
RaonSecure has been steadily increasing its research and development ratio relative to sales. It rose from 11.38% in 2017 to 19.16% last year. During the same period, R&D expenses increased from 2.4 billion KRW to 5.4 billion KRW. Through R&D investment, it developed bio-simple authentication and payment solutions. RaonSecure's 'TouchEn OnePass' passed the global product compatibility test in the international FIDO standard certification review. Unlike the existing server-side personal identification verification method, it is a user authentication solution that authenticates users on a secure hardware security device within the user's owned smart device and verifies it on the server based on public key infrastructure.
Sales are also increasing. From 21.2 billion KRW in 2017 to 30.4 billion KRW last year, it increased by 43% in two years. Sales in the first quarter of this year were 5.3 billion KRW, about 33% higher than the same period last year.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
