[Reporter’s Securities Filing Review] Protinah Expects to Turn Profitable by 2027

Possesses a Big Data Platform for Protein Analysis
"Major Shareholder's Stake to Drop to 18% After Listing"

Protinah has submitted its securities registration statement and is officially starting the process for an initial public offering (IPO). The company plans to list on KOSDAQ through a technology evaluation. Like most companies entering the market via technology evaluation, Protinah is currently operating at a loss. However, the company expects to turn profitable by 2027 through stable growth in its core business areas.

Protinah was founded in 2015 as a faculty startup from the Korea Advanced Institute of Science and Technology (KAIST). The company was the first in the world to commercialize the 'SPID Platform (Single-molecule Protein Interaction Detection)', a proprietary platform capable of analyzing protein-protein interactions (PPI) at the single-molecule level.

Based on this platform, Protinah offers products that provide solutions covering the entire drug development cycle, from PPI biomarker development to antibody design. The company believes that as it accumulates more PPI data, it will be able to leverage artificial intelligence (AI) to predict and visualize protein-protein interactions, potentially transforming the paradigm of protein research.

Revenue increased from 465.62 million KRW in 2022 to 2.3072 billion KRW last year, and in the first quarter of this year, it reached 1.06185 billion KRW, already achieving nearly half of last year's total revenue. However, operating losses widened from 5.37915 billion KRW to 9.12121 billion KRW over the same period, and the company remained in the red with a 1.57554 billion KRW loss in the first quarter of this year.

Protinah expects to turn profitable by 2027. According to the securities registration statement, revenue is projected to grow from 6.632 billion KRW this year to 32.221 billion KRW in 2027, while operating profit is expected to swing from a loss of 5.944 billion KRW this year to a profit of 9.972 billion KRW in 2027.

The reasons for this outlook are the growth of its next-generation biomarker development solution, PPI Pathfinder, and its antibody optimization and design solution, PPI Landscape. In the securities registration statement, the company stated, "Over the past four years, clients using the PPI Pathfinder service have shown high levels of satisfaction," and "most existing clients are requesting follow-up projects."

Regarding Landscape, the company emphasized, "We are accumulating a core antibody dataset applicable to various modalities," and "after the launch of the AI platform, we expect to sign multiple contracts simultaneously with several pharmaceutical companies." The company added, "Starting with two contracts in 2026, we assume that two to three new joint development contracts will be signed each year."

The total number of shares offered in the IPO is 1.5 million. The desired offering price ranges from 11,000 KRW to 14,000 KRW per share, making the total expected offering size between 16.5 billion KRW and 21 billion KRW.

Korea Investment & Securities, the lead underwriter, and Protinah calculated the desired offering price using the price-earnings ratio (PER). The PERs of comparable companies are: DreamCIS at 12.17 times, C&R Research at 16.86 times, Danaher, a U.S. healthcare company, at 36.70 times, and Revvity, a global life sciences solutions company, at 38.51 times. The average PER among these companies is 26.06 times.

The PER is considered high due to the inclusion of overseas companies. For reference, Danaher and Revvity recorded sales of $23.875 billion and $2.75502 billion last year, respectively, which is approximately 3.3 trillion KRW and 300 billion KRW.

Applying the present value of estimated net income for 2027 and 2028, which is 8.619 billion KRW, the per-share valuation was calculated at 19,641 KRW. A discount rate of 28.72% to 44.00% was then applied to determine the desired offering price.

Based on the lower end of the offering price, the 16.5 billion KRW to be raised will be allocated as follows: 5.27 billion KRW for facility funds, 3.6 billion KRW for operating funds, and 7.34 billion KRW for other uses. Facility funds will be used for expanding research facilities to comply with U.S. laboratory standards and for establishing automated production facilities. Operating funds will be used to expand the application of the SPID Platform technology and for product development. In addition, the IPO proceeds will be used to expand the business development team and operate the U.S. office.

The decrease in the largest shareholder's stake after listing is a concern. Currently, CEO Yoon Taeyoung holds a 21.20% stake in Protinah, which will decrease to 18.17% after the listing.