[Reporter Reading Securities Report] KTHreeEye Profitable Despite Technology Special Case... Knocking on KOSDAQ Door

Core Technology for XR Service Development 'XR Middleware Solution' Secured
Profit Despite Technical Special Cases... Operating Profit of 200 Million KRW in Q1 This Year

XR (Extended Reality) specialist company K3I is entering the KOSDAQ market. Despite being a company pursuing a technology-specialized listing, K3I is recording profits. This is unusual as technology-specialized listing companies generally operate at a loss.

K3I, established in 2000, is a developer of the 'XR Middleware Solution (Universe XR Framework)'. The 'XR Middleware Solution' is an open software that plays an essential role in the development and execution of XR content.

Based on the 'XR Middleware Solution', it is said that all types of content such as augmented reality (AR), virtual reality (VR), mixed reality (MR), media art, media facade, and interactive content can be produced. Recently, it has been combining with digital twin city solutions to create content for real-world-based metaverse services.

Although K3I is a company listing through a technology-specialized route, it is showing solid performance. In the first quarter of this year, it recorded sales of 3.5 billion KRW and an operating profit of 192 million KRW. Last year, it achieved sales of 13.1 billion KRW and an operating profit of 1.1 billion KRW. Compared to the previous year, sales increased by 21.58%, but operating profit decreased by 36.19%. The average annual sales growth rate over the past three years is 58.6%.

According to the securities registration statement, K3I expects to record sales of 23.4 billion KRW and operating profit of 4.6 billion KRW this year, and next year, sales of 33.9 billion KRW and operating profit of 4.6 billion KRW.

This year, sales related to digital twin construction are expected to become full-fledged, and the XR immersive content construction business is anticipated to grow. Through this, sales are expected to stabilize next year. K3I’s average sales proportion over four years shows that the second half of the year accounts for 70.9%, indicating that performance is expected to improve toward the end of the year.

However, as of the first quarter of this year, the order backlog stands at 13.64 billion KRW. Additional orders are needed to achieve the target performance. The company expects to secure orders worth 34.617 billion KRW this year.

K3I’s desired public offering price range is 12,500 to 15,500 KRW. To determine this offering price, the lead underwriter, Hana Securities, applied an average price-earnings ratio (PER) of 24.58 times based on the estimated net income of 8.5 billion KRW for 2025.

Based on this, the per-share valuation was 20,217 KRW. Applying a discount rate of 23.33% to 38.17%, the desired public offering price was calculated. For reference, the comparable listed companies used were Finger (20.45 times), Moco Msys (38.82 times), MI Cube Solution (22.88 times), Younglimwon Soft Lab (25.29 times), and Wavers (11.63 times), totaling five companies.

K3I will issue 1.4 million shares through this public offering. The funds to be secured range from 17.5 billion to 21.7 billion KRW. Based on the lower end of the offering price, 3.2 billion KRW will be spent on facility funds for purchasing research and development (R&D) equipment. The remaining 14 billion KRW will be used for R&D and marketing expenses.

Through the securities registration statement, the company explained, "We plan to secure technological superiority and advance XR services through continuous research and development," and "We intend to conduct a promotional hall business through content production," adding that it plans to strengthen promotional marketing expenses as well as marketing and sales personnel accordingly.