[IPO Spotlight] SBV Tech Prepares for Mass Production of Precision Reducers for Robots

Targeting KOSDAQ Listing in October... Special Technical Listing for Materials, Parts, and Equipment
Bookbuilding for Institutional Investors Scheduled for 15-16
Funds Raised to Be Invested in R&D and Expansion

[Asia Economy Reporter Park Hyungsoo] SBV Tech, a developer of precision reducers for robots, is going public on the KOSDAQ market to mass-produce precision reducers. As demand for industrial manufacturing robots surges due to factory automation and calls for localization of robot parts intensify, interest in SBV Tech in the initial public offering (IPO) market is growing.

According to the Financial Supervisory Service's electronic disclosure system on the 1st, SBV Tech plans to offer a total of 1.8 million shares, including 600,000 existing shares and 1.2 million new shares. The company aims to be listed on the KOSDAQ market next month through a special listing for materials, parts, and equipment technology. The proposed price range for the IPO is 10,100 to 12,400 KRW per share. The expected market capitalization after listing is approximately 60 billion to 73.7 billion KRW. Demand forecasting will be conducted over two days from the 15th to the 16th, after which the IPO price will be finalized.

Established in 1993, SBV Tech began producing ceramic balls used in ballpoint pens and ultra-thin bearings used in semiconductor processes through domestic technology. Enhancing its technological capabilities, the company succeeded in developing and mass-producing harmonic reducers necessary for robot operation.

Harmonic reducers enable lightweight design with high precision, featuring an angular transmission error of 0.01 degrees. They play a crucial role in precise machinery and robotic operations. While Japanese parts were previously imported, SBV Tech has become the first domestic company to start mass production of harmonic reducers.

SBV Tech has secured demanding technological capabilities and core proprietary technologies required for designing and manufacturing harmonic reducers, including ultra-thin bearing components, ultra-small precision machining, and wear-resistant heat treatment technologies.

Mirae Asset Securities, the lead underwriter, compared SBV Tech with four companies?Pometal, EnerTalk, Seoam Machinery Industry, and Woorim PTS?to calculate an appropriate corporate value. Based on the average price-to-earnings ratio (PER) of 27.8 times for these four companies, SBV Tech's corporate value was estimated at 112.3 billion KRW, with a per-share valuation of 18,470 KRW. SBV Tech expects the performance expansion effect from the localization of the reducer business to fully materialize from 2024, applying the present value of estimated net income for 2024. A discount rate of 32.86% to 45.31% was applied, resulting in the proposed IPO price range of 10,100 to 12,400 KRW.

Through the IPO, SBV Tech plans to raise approximately 12 billion KRW to be used for research and development costs to improve the quality of precision reducers and for expansion costs to secure smooth production capacity. The company plans to purchase additional machinery and expand production lines for precision reducer manufacturing within next year.

Choi Jaeho, a researcher at Hana Securities, said, "We expect direct benefits amid growing demand for localization of robot parts."