[IPO Preview] BI Matrix Targets Overseas Markets Through IPO

Expected Offering Price 9,100~11,000 KRW
"Strengthening Overseas Expansion and Program Advancement through IPO Funds"

BI Matrix, a specialist company in low-code solutions, is preparing for a KOSDAQ listing. The funds raised through the initial public offering (IPO) will be used for the development of generative artificial intelligence (AI)-linked products, marketing of core products, and strengthening domestic and overseas networks.

According to the Financial Supervisory Service's electronic disclosure system, BI Matrix plans to issue 1.2 million new shares for listing on KOSDAQ. The desired public offering price range is 9,100 to 11,000 KRW per share. The total expected amount to be raised is between 10.9 billion and 13.2 billion KRW. A demand forecast for institutional investors will be conducted from the 19th to the 25th of this month. General public subscription will take place on the 31st of this month and the 1st of next month.

Founded in 2005, BI Matrix primarily develops and supplies low-code-based automation solutions. The company provides business system construction solutions to leading domestic conglomerates, financial institutions, and public organizations, having completed over 1,000 projects for more than 700 institutions and companies to date. Low-code refers to developing business systems without coding or with minimal coding, enabling system construction. This field has emerged as a key strategic technology trend in the global IT market amid a shortage of software developers.

In 2020, BI Matrix recorded sales of 17.6 billion KRW and an operating profit of 400 million KRW. Last year, sales reached 27.7 billion KRW with an operating profit of 4.6 billion KRW. As of the first half of this year, sales were 11.8 billion KRW with an operating loss of 1.2 billion KRW, representing a 9.4% increase compared to the same period last year. However, the operating loss widened to 1.2 billion KRW.

Nonetheless, there is a high possibility of performance improvement in the second half of the year. Due to the nature of software development and sales businesses, most sales are concentrated in the fourth quarter. The company explained in its securities registration statement, "Due to the industry characteristic where most customer orders are concentrated in the second half of the year, sales seasonality is clearly evident. This phenomenon is even more pronounced when public institutions and large corporations, which are major customers, account for a high proportion."

If BI Matrix raises 10.9 billion KRW based on the lower end of the public offering price, it plans to allocate 4.9 billion KRW for R&D, 3.1 billion KRW for strategic business investments, and 2.7 billion KRW for internal reserves.

First, for R&D, the company will advance G-MATRIX, a generative AI-linked data analysis solution launched in July. 'G-MATRIX' is a solution that extracts necessary data and automatically generates reports simply by inputting analysis keywords. It will also be used for the development and advancement of a Large Language Model (LLM) engine that can address security and ethical issues when companies adopt generative AI.

Additionally, 3.1 billion KRW will be used for promoting the company's products and marketing domestically and internationally. Of this, 700 million KRW will be spent on strengthening marketing for the AUD platform. The AUD platform is a low-code-based integrated UI development solution developed by BI Matrix. It enables the construction of various functions needed for business system development through low-code. By automating various coding tasks, even users with limited related knowledge can easily develop business systems.

Furthermore, 650 million KRW will be invested to expand domestic partner companies. The remaining 1.75 billion KRW will be used to expand global business. In the Japanese market, the company plans to increase sales by expanding dealerships. In the recently entered U.S. and European markets, funds will be used to reinforce business organizations and support activities for local customer sales and partner acquisition.

IBK Investment & Securities, which is in charge of the listing underwriting, selected two companies, K-Sign and BridgeTec, to determine the public offering price for BI Matrix. Applying an average price-earnings ratio (PER) of 26.49 times from comparable companies, the company's per-share value is 13,022 KRW. A discount rate of 15.53% to 30.12% was then applied.