[Click eStock] "LB Investment, Expected to Recover Annual Operating Profit of 10 Billion KRW"

Hana Securities analyzed on the 2nd that LB Investment will recover operating profits in the 10 billion KRW range this year.

As of the end of 2023, LB Investment's assets under management amounted to 1.243 trillion KRW, and it plans to additionally raise funds worth 75 billion KRW this year.

The total equity increased from 94.4 billion KRW in 2022 to 115.5 billion KRW in 2023, and revenues also rose significantly, recording operating revenue of 27.6 billion KRW, operating profit of 8.6 billion KRW, and net income of 6.5 billion KRW in 2023.

Based on last year's performance, it is trading at a PBR below 1x and a PER around 15x, but considering profit growth, PBR and PER are expected to decline further.

The overall fund average IRR is 27.4%, and with a strong portfolio, performance growth is expected to continue. Since the main investment point of venture capital is the portfolio it holds, it is necessary to look at the investee companies expected to be exited this year.

Abley Corporation started its initial investment in 2019 at a valuation of 69.2 billion KRW, with cumulative investments of 20 billion KRW, and is currently valued at over 1 trillion KRW.

ReebsMed, a company developing laparoscopic surgical instruments, began its initial investment in 2016 at a valuation of 32.6 billion KRW, with cumulative investments of 4 billion KRW, and is currently valued at about 790 billion KRW.

Standard Energy, a vanadium ion battery company, started its initial investment in 2019 at a valuation of 35 billion KRW, with cumulative investments of 6.5 billion KRW, and is currently valued at about 300 billion KRW.

In addition, there are many investments such as Musicow, Perrige Aerospace (small space launch vehicles), and ELICE (coding education platform and content) that have already been recognized at more than 10 times their initial investment valuation, so high returns are expected through future exits.

More than four companies, including DND Pharmatech, which has already submitted a securities registration statement this year, are expected to go public via IPO.

LB Investment has demonstrated stable operational capabilities by generating performance fees for 10 consecutive years, with an average annual performance fee of 10.7 billion KRW over the past five years. Considering the current portfolio, it is expected to recover operating profits in the 10 billion KRW range in 2024. Kim Gyusang, a researcher at Hana Securities, said, "It is expected to continue high performance growth with an attractive portfolio, and since it is trading at a low PBR, it deserves attention."