[Reporter Reading Securities Registration] Bankware Strengthens Overseas Expansion through Listing... "Reduced Burden of Decreasing Major Shareholder Stake"

After Listing, CEO Lee Kyung-jo's Stake Falls Below 20%
"Raised Funds to Strengthen Global Business Capabilities"

Bankware Global is undergoing a public offering process to be listed on the KOSDAQ. The funds raised will be used for research and development (R&D) and the development of overseas base centers. The largest shareholder's stake, which will decrease from 21% to 18% after the listing, is expected to be a burden.

Bankware Global, established in 2010, is a cloud core banking software development company. For reference, core banking refers to the term for a bank's core operations and related products and services such as deposits, loans, payments, installments and leases, trade finance, foreign exchange, cards, and accounting. The financial software developed by Bankware Global handles customers' financial transactions such as loans, deposits, and foreign exchange. Financial institutions use this to perform overall tasks from customer management to product sales and transaction processing.

They have supplied packages to major companies such as MyBank, an internet bank of China's Alibaba, Korea's K-Bank, and Taiwan's Line Bank. To date, they have secured about 100 clients across seven Asian countries, including commercial banks, savings banks, card companies, capital companies, and fintech firms.

Bankware Global is offering a total of 1.4 million shares. The desired offering price ranges from 16,000 to 19,000 KRW per share. They plan to raise approximately 22.4 billion to 26.6 billion KRW. Bankware Global is currently a deficit company and plans to list through a technology special case. Therefore, the offering price was calculated based on future expected performance. According to the securities registration statement, Bankware Global recorded losses every year except 2021 from 2021 to 2023. In the first quarter of this year, it recorded an operating loss of 3.634 billion KRW.

The lead underwriter, Mirae Asset Securities, expects Bankware Global to record sales of 73.522 billion KRW and a loss of 5.86 billion KRW this year. However, they forecast a turnaround to profitability in 2025 with sales of 95.328 billion KRW and operating profit of 3.219 billion KRW. In 2026, sales and operating profit are expected to reach 13.353 billion KRW and 18.281 billion KRW, respectively.

Mirae Asset Securities calculated the desired offering price by applying the average price-earnings ratio (PER) of similar companies to the estimated net profit of 15.516 billion KRW in 2026. The applied PER was 29.07 times. This is the average of five comparable companies including Webcash (PER 31.27), Finger (21.37), Kukon (30.10), BridgeTec (31.19), and KCS (31.41). Based on this, the per-share valuation was 26,723 KRW. A discount rate of 28.90% to 40.13% was applied to derive the desired offering price.

Bankware Global plans to use the funds raised mainly for R&D and overseas expansion. Based on the lower end of the offering price, they expect to secure 21.8 billion KRW (net proceeds). Of this, 9.5 billion KRW will be used for R&D and building the development environment for development personnel. Another 3.3 billion KRW will be invested in marketing and training. In particular, 3 billion KRW will be poured into capital increases for Bankware Asia and Bankware Japan for overseas business investment. Additionally, 5 billion KRW will be spent on establishing a development center in Southeast Asia.

If the listing proceeds successfully, Bankware Global's financial structure is expected to improve. The debt ratio was very high at 342.4% at the end of last year and 460.1% in the first quarter of this year. For reference, the industry average debt ratio in 2022 was 78.59%. However, as the number of issued shares increases after listing, the debt ratio itself is expected to decrease.

The burden lies in the reduced largest shareholder stake. CEO Lee Kyung-jo, the largest shareholder of Bankware Global, currently holds 21.23%. However, this will decrease to 18.17% after the listing. If all stock options are exercised, it will further decrease to 16.81%. This may cause difficulties when raising additional funds in the future. For reference, Bankware Global signed a 'Joint Purpose Holding Agreement' to strengthen management stability. They also agreed to jointly exercise voting rights and prohibit third-party sales of individually held shares for three years after the listing.