AUM Now Reaches around KRW785bn
The author is an analyst of NH Investment & Securities. He can be reached at junsup@nhqv.com. -- Ed.
Helped by large-scale fundraising in 2021, Company K’s AUM now reaches around W785bn. It should enjoy stable revenue flow in 2022 and continued brisk earnings growth going forward.
Fund management fees and valuation/disposal gains to keep growing on large-scale fundraising
Helped by fundraising of around W300bn this year, Company K’s AUM reaches around W785bn. In line with higher AUM, it should report fund management fees of W8.7bn (+14% y-y) for 2021 and W11.5bn (+32% y-y) for 2022, backed by the start of recognition of management fees from a new deal fund.
Company K’s equity-method gains, and disposal and valuation gains on prop-trading accounts should keep climbing steadily on: 1) increased fund investment alongside larger AUM and expanded capital; and 2) planned IPOs for a number of promising plays in its portfolio. Its prop-trading this year is also showing steep earnings growth. We estimate that combined equity-method gains and disposal and valuation gains for 2021 totaled W14bn. With companies like VC and Anymedi preparing for IPOs, sound earnings should continue in 2022.
Company K is unlikely to record any performance incentives this year, but it is expected to book performance incentives of around W5.2bn in 2022.
2021E NP: +43% y-y; 2022F NP: +23% y-y
We foresee 2021E NP of W14.1bn (+43% y-y) and 2022F NP of W17.3bn (+23% y-y). Recent interest rate hikes present a burden for the VC industry in terms of fundraising. But, healthy earnings are to sustain at K Company as: 1) it has already achieved large-scale fund raising; and 2) its fundamentals are solid.