[Column] For Axvis, Improving Revenue Concentration Structure Is Key

High-Power Laser Technology Drives Success in Battery Sector
Over 50% of Revenue Concentrated in a Single Client
Expanding into Semiconductors, Defense, and Aerospace Industries

Axvis has submitted its securities registration statement, initiating the process for listing on the KOSDAQ. The company has achieved results in the battery industry by leveraging its high-power laser technology. However, its heavy reliance on a single customer for revenue is a point that investors should carefully consider. While Axvis plans to diversify its revenue sources by expanding into sectors such as semiconductors and the defense industry, its current revenue structure could lead to future earnings volatility.

According to the financial investment industry on January 6, Axvis is a specialized company established in 2009 that provides laser solutions for high-precision product processing. It owns the world’s first intelligent high-power laser platform, VisionSCAN, which integrates artificial intelligence (AI) and robotics technologies. VisionSCAN is characterized by ultra-high-speed processing, AI-based high-precision control, and the minimization of process cycles through robotics. The equipment produced is mainly used in industries such as mobility, batteries, and camera modules.

Revenue has been steadily increasing. Notably, the recovery in profitability is encouraging. Axvis’s revenue rose from 31.2 billion won in 2022 to 46 billion won in 2023, and further to 55.7 billion won in 2024. In contrast, operating profit decreased from 4.4 billion won in 2022 to 2.4 billion won in 2023. As of the third quarter of this year, cumulative revenue was 35.1 billion won and operating profit was 4.3 billion won, representing a 3.8% increase in revenue and a turnaround to operating profit compared to the same period last year.

In its securities registration statement, the company explained, “In the fourth quarter, revenue is expected to increase slightly year-on-year due to expanded shipments from securing large-scale projects. Operating profit is also expected to improve further as a result of increased revenue recognition.”

However, the concentration of revenue from a specific client is cited as a risk factor. According to the securities registration statement, the proportion of revenue from Company H increased from 42.3% in 2022 to 50.5% in 2023, and further to 57.0% as of the third quarter this year. This structure means that performance volatility could increase depending on the investment plans or management situation of this particular client.

The company is aware of these risks as well. Axvis stated in its securities registration statement, “A high proportion of revenue from Company H offers the positive aspect of securing a stable revenue source. However, we are exposed to the risk of revenue fluctuation due to insufficient resilience against factors such as deterioration in the client’s business performance or changes in purchasing policies.”

Accordingly, the company intends to diversify its revenue sources in the future. Axvis emphasized, “We are continuously working to reduce our dependence on major clients by discovering new partners and restructuring our client base. We plan to attract new customers by expanding our business into advanced industries such as semiconductors, defense, and aerospace.”

The price-earnings ratio (PER) method was applied to determine the offering price. Mirae Asset Securities, the lead underwriter, selected KOSSES and MOT as peer companies, applied their average PER of 27.60 times (28.71 times and 26.49 times, respectively), and calculated an estimated share value of 15,014 won by reflecting annualized net profit as of the third quarter this year. After applying a discount rate of 23.40-32.73%, the desired offering price band was set at 10,100 won to 11,500 won.

Through this initial public offering (IPO), Axvis plans to offer 2.3 million new shares. The expected offering amount is between 23.2 billion won and 26.5 billion won. Of the funds raised, 17.5 billion won will be allocated to the expansion of new headquarters and manufacturing facilities. The company expects this to increase its manufacturing capacity (CAPA) by more than 900% compared to current levels. The remaining funds will be used for research and development (R&D) and securing raw materials.