The Appearance of Companies Selling Korean SW in the U.S

MRO (058970) / Mirae Asset Securities Kim Soo-jin

The Appearance of Companies Selling Korean SW in the U.S

■ Start in the U.S

- Global entry. Starting in May
- After acquiring Samsung SDS in April last year, cloud-based product development has been completed for about a year
- Starting with customers of o9 (one), a global SaaS SCM company
- Samsung SDS' sales network and BCG are also used as sales routes
- A situation where the possibility of securing new customers is somewhat visible

■ the competitiveness of MRO

- Direct Purchasing Supplier Management (SRM): Procurement of purchases for key products in each industry
- Similar global peer companies are mostly indirect buyers: procurement of office supplies, etc
- MRO is the only company globally to offer industry-specific SRM starting with consulting

■ Cloud transformation + digitalization is improving performance even with domestic orders in progress

- Recently, large companies are strengthening SRM construction with subsidiaries and overseas subsidiaries as they pursue digitalization (DX)
- Representatively, in May, Samsung Electronics announced 49 billion orders for next-generation SCM projects, and proceeded for 1 year and 9 months
- As a result, sales of 90.8 billion won (+44% YoY) in 24 years are expected
- Gains on stock options and overseas expansion, turnaround expected around 26

■ EV/SALES Valuable Companies

- EV/SALES Multiple Applications to US SaaS Companies Are Reasonable
- 1) As software shows network and lock-in effects, securing early industrial market share is important and focuses on top-line growth rather than profit
- 2) Most of them have a lot of stock options
- 3) Most of the costs are labor costs, so if a certain level of Q is secured, the effect of operating leverage will be maximized and the operating profit margin will surge
- Currently, MRO Peer Companies Are Trading EV/SALES 7-12X
- If the TAM increases due to the full-fledged global order, it will be a meaningful multiplex up factor

Link to the report: https://han.gl/krqUf

Please refer to the report for details, thank you.