[IPO] Sandol, Can the 'Flash' Sales in the First Half Continue?

Yoon Young-ho, Co-CEO of Sandoll. / Photo by Sandoll

[Asia Economy Reporter Jang Hyowon] Market attention is focused on whether the font production company Sandoll, which is preparing for a KOSDAQ listing, can sustain its sales growth in the first half of this year. This is because the previously negligible 'license sales' occurred in the first half of this year.

On the 11th, Sandoll held a press conference in Yeouido, Seoul, to introduce the company ahead of its KOSDAQ listing. Sandoll is the first digital font company in Korea and is the industry leader with global-level font production and service capabilities through continuous research and development (R&D).

Sandoll's sales last year were 12 billion KRW, with an operating profit of 4.8 billion KRW. Sales showed an average annual growth rate of 30%, with 7.2 billion KRW in 2019 and 10.3 billion KRW in 2020, and recorded 11.3 billion KRW in sales in the first half of this year. This amount is more than 90% of last year's total sales in just six months.

The sharp growth in sales in the first half of this year is due to 'license sales.' Sandoll's sales consist of SandollGureum, corporate exclusive fonts, and license sales.

SandollGureum is a cloud-based font platform that provides customers with a subscription service not only for fonts owned by Sandoll but also for fonts from external companies. Corporate exclusive font sales involve creating fonts based on orders from companies. License sales are a business that allows the use of fonts owned by Sandoll for a certain period.

As of last year, the sales composition was 70% SandollGureum, 21% corporate exclusive fonts, and 7% license sales. Since 2019, the proportion of license sales has not exceeded 8%. However, in the first half of this year, license sales recorded 4.9 billion KRW, accounting for 44% of total sales.

This license sales occurred through a single contract with a specific company, amounting to a 4.6 billion KRW deal. A Sandoll official said, "The contract period and the other party cannot be disclosed due to confidentiality clauses, but it is expected to be revealed around the end of this year," adding, "Similar sales are expected to occur in the future."

Yoon Youngho, co-CEO of Sandoll, said, "Through the KOSDAQ listing, we will transparently show our management performance to customers and shareholders, while expanding the popularity of fonts domestically and internationally to become a leading global creator content company."

Meanwhile, Sandoll's public offering amount is approximately 28 billion KRW based on the upper limit of the offering price band. The company plans to strengthen new businesses such as digital content and platform technology acquisition based on funds raised through 100% new share issuance and expand overseas business through mergers and acquisitions (M&A) with global font producers.

The total number of shares offered is 1.49 million. The desired offering price band per share is 16,000 to 18,800 KRW. Demand forecasting for institutional investors will be conducted over two days on the 12th and 13th of this month to finalize the offering price, followed by general subscription on the 18th and 19th. The company is scheduled to be listed on KOSDAQ next month, with KB Securities as the lead underwriter.