A Investment Guide. Daekyo Co., Ltd. September, 2004

Transcription

1 A Investment Guide Daekyo Co., Ltd. September, 2004

2 Table of Contents 1 Executive Summary Financials & business performance Mid ~ Long term Vision Investment Points Appendices

3 Executive Summary

4 Brief History 2000 ~ Present 1975 ~ 1989 January 1976 Founded the Korea Gongmun Math research academy Published the Noonnoppi Math December 1986 Incorporated Daekyo Co., Ltd 1990 ~ 1999 July 1991 Changed the brand name from Gongmun to Noonnoppi June 1999 Noonnoppi Math selected as a long-term hit product by the Korea Management Association The subscription members reached 2 Million July 2000 Established an Educational Internet portal site, edupia.com October 2002 Selected as the Best Corporation at the Human Resource Management Awards April 2003 Released E.nopi Math for the overseas market February 2004 Successfully listed on Korea Stock Exchange market(kse) 4

5 Highlights Dominant market leader in weekly home-tutoring market and high quality products (2003 sales, net profit of billion won and 60.9 billion won, respectively) Growth potential of robust domestic education market growth Ample cash flow on cash-based sales Growth potential of diversified revenue sources by new businesses launched Stable dividend policy and shareholders ownership structure 5

6 Highlights Dominant market leader in weekly home-tutoring market and high quality products Brand Leader Dominant Market Leader 6 consecutive-year winner of Brand Power award by Korea Management Association(KMA) Highest market dominance in domestic market Strongest brand loyalty (Year 2003) KRW 3.1 Trillion Differentiated Product others 44.3% Daekyo 23.9% Systematic program of specified level of study, designed to encourage self-study Different product portfolio from competitors Powerful R&D from independent educational J 9.5% W 9.7% K 12.6% research institute and its high asset value 6

7 Highlights Growth potential of robust domestic education market Domestic education market Market segmentation (end-2003) [unit: trillion KRW] CAGR 12.8% 17.9 trillion [Source: Daekyo] Largest portion to GDP among OECD nations 2.82% to GDP (highest portion among OECD nations), 4 year CAGR of 12.8% Growth potential of children's education and internet education 7

8 Highlights Ample cash flow on cash-based sales Weekly home-tutoring business Subscribers : 2.30M Tutors : 14,043 Avg. Monthly fee : KRW 30,000 ~ 35,000 Pre-deposit type sales Sales network nationwide Inelastic to economic cycle Strong cash flow and healthy financials Differentiated business structure Strong cash flow Trade receivables turnover: 39.4 times Easier business expansion on organizational flexibility Established & stabilized earnings Trade receivables turnover is calculated upon 2004 sales forecasts. 8

9 Highlights Growth potential of diversified revenue sources by new businesses s launched Sales from new business [Unit: KRW Million] Successful new biz launch & profitability enhancement of Noonnoppi biz Growth Potential Sobics 1.Infants education 2.Reading materials for door to door sales 3.In-school program -Camp Academic Institutes 1.Acadmy 2.Class 3.Calritz Others 1.Soluny 2.Futurekids 3.Oveseas sales Network (E Nopi) 100,000 80,000 60,000 40,000 20,000 23,818 CAGR 55% 43,180 63,413 88,300 Cash Cow Weekly home-tutoring [Noonnoppi[ Noonnoppi] Wide business network : stepping stone for new biz E SOBICS -Camp Others 9

10 Highlights Growth potential of diversified revenue sources by new businesses s launched Core Biz New businesses Noonnoppi Sobics - Camp Others Weekly home tutoring Math, Science, English, Korean & Chinese letters Educational For infants Sobics BeBe Korean & Math for Infants Door to door Sales Biz Sobics BeBe Korean & Math for Infants In-School program After school computing class Educational institutes -Camp Class -camp Academy Calritz Soluny Premium Home Tutoring E Nopi Overseas Sales Network 741.9bn 18.5bn 22.4bn 9.5bn 9.3bn 3.8bn Sales Breakdowns by Business Units in

11 Highlights Stable and High dividend policy Stable & high dividend policy Total dividend payout [Unit: KRW] Description 2000 Mid term A dividend per share Common Preferred 1,000 1, [Unit: KRW Billion] Year end , , ,250 1, Mid term Net Profit Total dividend payout Stocks Issued : Common(8,470,285)/Preferred(1,942,699) 11

12 Highlights Stable shareholders ownership structure [Common Stock] Ownership Structure in February Ownership Structure in August 9.30% 4.72% 8.61% 58.48% 17.23% 11.11% 58.48% 18.89% 4.32% 8.87% Daekyo Network (4,953,120 Shares) Public Subscription (1,600,000 Shares) Relatives (787,709 Shares) ESOP (400,000 Shares) Individuals (729,456 Shares) Daekyo Network (4,953,120 Shares) Relatives (750,991 Shares) ESOP (365,965 Shares) Foreign Investors (1,459,110 Shares) Individuals (941,099 Shares) Note: ESOP(Employee Stock Ownership Plan) 12

13 Highlights Stable shareholders ownership structure [Preferred Stock] Ownership Structure in February Ownership Structure in August 1.86% 22.59% 98.14% 73.76% 3.64% Individuals (1,906,474 Shares) Relatives (36,225 Shares) Individuals (1,433,031 Shares) Relatives (70,781 Shares) Foreign Investors (438,887 Shares) 13

14 2. Financials & business performance

15 Financials Summary of Income Statement Q (Unit: KRW Million ) Q Sales 680, , , , ,140 Gross Profit 139, , ,262 51,554 53,102 Operating Income 47,013 55,955 70,740 24,659 25,322 Ordinary Income 40,806 45,241 85,943 27,933 29,336 Net Income 30,102 27,542 60,980 21,112 18,759 Operating Income Rate(%) 6.9% 7.3% 8.8% 11.47% 11.88% Note) All figures are audited by PriceWaterHouseCoopers 15

16 Financials Summary of Balance Sheet (Unit: KRW Million ) H Total Asset 395, , , ,513 Current Asset 88,973 98, , ,414 Non-Current Asset 306, , , ,099 Total Liabilities 177, , , ,643 Current Liabilities 106, , , ,367 Long-term Liabilities 71,203 84,762 70,638 64,276 Total Stockholder s Equity 218, , , ,870 Note) All figures are audited by PriceWaterHouseCoopers 16

17 Financials Summary of Statistic Ratio H H Current Ratio 99.37% % % Quick Ratio 84.42% 92.61% % Debt Ratio 81.18% 71.40% 50.30% Operating Income Rate 8.75% 8.78% 11.68% ROA 13.58% 12.98% 14.32% ROE 25.21% 23.30% 22.83% Increased Rate of Total Sales 6.41% 5.35% 6.50% Assets Turnover Increased Rate of Total Assets 2.54% 22.36% 15.41% Note) All figures are audited by PriceWaterHouseCoopers 17

18 3. Mid ~ Long term Vision

19 Mid ~ long term Vision 21C C Vision Learning Materials Diversifying products Diversifying sales channels Developing new markets Supporting Public Education After school program Psychology test Unique program for infants Global Educational Service Provider Cyber Education Edupia.com On-line Education Overseas Education Developing overseas market Modifying program to meet needs from specific country Value Customer Performance Change Management GWP, ERP 19

20 Mid ~ long term Vision Management goal Core Asset First Mover Brand Power 2003 Expanding period To stabilize the existing business as a cash cow To diversify business area through developing new business items 2009(E) Fruit-bearing period To become a global educational service provider through maximizing management capability National network Sales : KRW 805.4bn Sales : KRW 3,000bn Contents development capability Noonnoppi : 92% Others : 8% Noonnoppi : 50% Others : 50% Note) 2009 sales is forecasted by Daekyo 20

21 4. Investments Points

22 Investment Points The Number 1 Player Market Share (Major Education Companies) (unit: KRW billion) Year Market Size Daekyo % K Co. % W Co. % J Co. % , , , Brand Power 6 consecutive-year winner of Brand Power award by Korea Management Association(KMA) The Korea s most admired company, No 1 in the educational sector award by Korea Management Association Consulting(KMAC) 22

23 Investment Points The Number 1 Player Sales Network Q Sobics Description Noonnoppi Door to door sales Infants education Soluny Total Sales Network No of Tutors 14,043 3, ,066 R&D Capability Q Description Product Development Center R&D Center Total No of Employees

24 4. Appendices

25 Weekly home-tutoring [Noonnoppi] A growing multi-studying rate & Tutor s s average income Multi-Studying Rate Average Monthly Income per Tutor [Unit:subjects studied per subscriber] 2,500 [Unit: thousand KRW] (Note: November, 2003) CAGR 3.1% 2,000 1,500 1, % increase in number of subjects per subscriber Guarantee the highest income in the industry 25

26 New Business [Sobics] Expectation of a rapid growth in infants & kids market Education for infants Sales Trends Targeting the age group of infants 0 to 6 Providing high quality educational materials Supplying kids program only designed for kindergarten(newly starts) Door-to to-door sales business [unit: a hundred million KRW] CAGR 68% Customers range from infants to elementary students. Sales forces mainly built upon door to door sales and our sales forces manpower. This sales department is believed to generate the synergy with Noonnoppi and Sobics (E) Sobics Note) 2004 sales estimated by Daekyo Einstein 26

27 New Business [ -CAMP] Creating distinctive business strategy -Camp Expectation of obtaining competitive position through providing various academic services and combining existing business with web-based education. Academy: Synthetic academy designed for 4 to 6 elementary students and middle school students Class: Specialized by each subject mainly for middle to high school students Calritz: English language school for kids Distinctive Positioning Sales Trend 200 [Unit: a hundred million KRW] Quality Class Class Academy CAGR 196.6% Size (E) Note) 2004 sales estimated by Daekyo 27

28 New Business [In-School Program & Soluny] Aiding public educational sector with outstanding in-school program In-school computer classes This business is very meaningful to Daekyo in terms of taking part in building the infrastructure in the public education sector. Among 10 Manifestoes to encourage the role of public education by MOE & HRD; - Running After school program to meet various needs from public schools, students and their parents. - Promoting collaboration between the Industrial sector and public education to make synergies for each other. MOE & HRD: Ministry of Education & Human Resources Development Soluny; Group-based Interactive Teaching Program Premium Home Tutoring At present, we have two programs distinguished by Korean & English languages; - DokSeo Forum (Reading, Writing, Discussing from recommended Korean books) - English Forum (Reading, Writing, Listening and small group discussion) 28

29 Question & Answer