[IPO Spotlight] SandsLab Expects Net Profit of 12 Billion Won in 3 Years

Kiwoom Securities to Lead IPO for KOSDAQ Listing
Expected Revenue of 9 Billion KRW This Year... Targeting Over 30 Billion KRW in Sales in 3 Years

[Asia Economy Reporter Park Hyungsoo] Cybersecurity company SandsLab is preparing to list on the KOSDAQ market early next year. The lead underwriter, Kiwoom Securities, applied SandsLab’s projected net profit for 2025 to determine its appropriate corporate value. The estimated net profit is several tens of times larger than last year’s net profit. SandsLab is expected to focus on convincing investors of the feasibility of these performance estimates until the demand forecast is completed.

According to the Financial Supervisory Service’s electronic disclosure system on the 19th, SandsLab plans to issue a total of 3.7 million shares for its KOSDAQ listing, including 3 million newly issued shares and 700,000 existing shares for sale. The proposed price range is 8,500 to 10,500 KRW per share. The minimum public offering size amounts to 31.4 billion KRW.

Founded in 2004, SandsLab operates Malwarez.com, which collects and analyzes global cyber threat intelligence (CTI). Malwarez.com collects and analyzes over 2 million new and variant malware samples daily. The total number of malware samples collected by Malwarez.com reaches 2.2 billion. Based on the collected data, SandsLab provides security solutions that predict various threats and respond to attacks. Until the third quarter of this year, SandsLab recorded sales of 3.2 billion KRW, an operating loss of 1 billion KRW, and a net loss of 700 million KRW. Last year, it achieved sales of 5.4 billion KRW, operating profit of 500 million KRW, and net profit of 700 million KRW.

CEO Kim Ki-hong founded SandsLab as a student venture in 2004. Over 18 years since its founding, CEO Kim has researched and developed core technologies necessary for malware analysis and tracking. In 2017, Ksign, a KOSDAQ-listed company, participated in SandsLab’s paid-in capital increase and became the largest shareholder. Despite the change in the largest shareholder, CEO Kim continues to lead SandsLab.

Kiwoom Securities selected three comparable companies?Ksign, CyberOne, and Susan INT?to evaluate SandsLab’s corporate value. Using the average price-to-earnings ratio (PER) of 26.1 times from these three companies and SandsLab’s estimated net profit of 12 billion KRW in 2025, Kiwoom Securities valued SandsLab at 181.7 billion KRW. Kiwoom Securities judged that applying the estimated net profit at a point when the core CTI product sales show stable growth and expand to various clients is appropriate for evaluating corporate value.

The domestic cybersecurity market size is expected to grow at an average annual rate of 6.2%, from 343 million USD last year to 463 million USD by 2026. In the cybersecurity industry, new security systems capable of proactively responding to previously unknown attacks are gaining attention. SandsLab is confident in its growth because it analyzes known attacks through data collection, analysis, and sharing, and prepares for future cyber threats.

According to the performance estimates presented by Kiwoom Securities, SandsLab’s sales will increase to 13.7 billion KRW in 2023, 20.3 billion KRW in 2024, and 30.9 billion KRW in 2025. During the same period, net profit is expected to surge to 2.7 billion KRW, 6.1 billion KRW, and 12 billion KRW respectively. These estimates reflect the characteristic of cybersecurity companies where profits increase rapidly once sales exceed a certain scale.

However, it is uncertain whether institutional investors participating in the demand forecast will agree with the optimistic growth outlook. Considering next year’s economic outlook, major companies are likely to reduce investment and expenditure. As the importance of cyber threat intelligence grows, competition is intensifying. SK Shieldus, Igloo Corporation, ESTsecurity, and AhnLab have all launched related products. SandsLab will conduct the demand forecast over two days from the 10th to the 11th of next month and finalize the public offering price.