Doosan Enerbility: Thoughts on the IPO of Doosan Skoda Power

• Doosan Skoda Power is getting ready to complete an IPO on the Prague Stock Exchange. The IPO is aiming to gather up to 2.53 billion crowns, or about US$105.5 million.

• Post IPO, Doosan Power System plans to maintain a 67% ownership. Doosan Enerbility (034020 KS) owns a 100% stake in Doosan Power Systems.

• If Doosan Skoda Power is valued at 8.3 billion crowns and if we annualize the company's net profit to 473 billion in 2024, this would suggest a P/E of 17.5x.

Doosan Skoda Power is getting ready to complete an IPO on the Prague Stock Exchange. The IPO price range is from CZK 220 and CZK 260, aiming to gather up to 2.53 billion crowns, or about US$105.5 million. A successful IPO would value the company at around 8.3 billion crowns (US$346 million).

The IPO includes 6.67 million existing shares from Doosan Power Systems with 2.9 million new shares from Doosan Skoda Power, totaling 31.9 million shares, as well as 0.96 million shares for overallotment. Post IPO, Doosan Power System plans to maintain a 67% ownership. Doosan Enerbility (034020 KS) owns a 100% stake in Doosan Power Systems.

Valuation - If Doosan Skoda Power is valued at 8.3 billion crowns and if we annualize the company's net profit to 473 billion in 2024, this would suggest a P/E of 17.5x.

Doosan Skoda Power Company Background

Doosan Skoda Power which is based in Czechoslovakia, specializes in the production of steam turbines for power generation. In 2009, it was acquired by the Doosan Group of South Korea in a deal worth US$662 million.

The company’s history dates back to the early 20th century as part of the renowned Škoda Works, one of the largest industrial conglomerates in Czechoslovakia. The roots of Doosan Škoda Power trace back to 1859 when Škoda Works was established in Plzeň by Emil Škoda. Initially focused on armaments and heavy machinery, the company diversified into energy engineering during the early 20th century.

After World War II, Škoda Works became a state-owned entity under the socialist regime. The company expanded its engineering capabilities, becoming a leading supplier of steam turbines across Europe. In the 1990s, following the dissolution of Czechoslovakia and the fall of communism, Škoda Works underwent privatization.

Doosan Skoda Power specializes in designing and manufacturing steam turbines ranging from 10 MW to 1,200 MW. These turbines are used in fossil-fuel power plants, nuclear power plants, and renewable energy facilities. The company provides a comprehensive suite of services, including turbine retrofitting and modernization, maintenance and repair, and performance optimization.

Doosan Skoda Power’s turbines are installed in over 70 countries. Major competitors in the steam turbine market include Siemens Energy, General Electric (GE), and Mitsubishi Power.