Korea Small Cap Gem #27: Wins Co.

• Wins Co. is engaged in the business of developing and supplying information security solutions and developing software related to network security to protect networks from cyber threats and viruses.

• The company has a consistent growth in sales and profits. It also has a strong balance sheet. At the end of 2023, it had a debt ratio of 15.4%.

• Wins Co is trading at EV/EBITDA of 1.7x, P/E of 7.8x, and P/B of 0.9x in 2024 which are 75%, 26%, and 25% lower than the historical valuation multiples.

Why Invest in Wins Co?

• Wins Co Ltd (136540 KS) is the 27th company in our Korea Small Cap Gems series. The company provides network security services to protect networks from cyber threats and viruses.

• The company has a highly consistent growth in sales and profits along with excellent balance sheet.

• The company is deeply undervalued with cheap valuation multiples. Wins Co is trading at EV/EBITDA of 1.7x, P/E of 7.8x, and P/B of 0.9x in 2024 which are 75%, 26%, and 25% lower than the historical valuation multiples.

Share buyback and cancellations - On 15 March, the company announced that it will cancel 0.22 million shares, representing 1.6% of outstanding shares. This share cancellation will be conducted on 21 March 2024. On 18 March, the company also announced that it will buy back 2 billion won worth (worth 1.1% of current market cap) of additional shares from 18 March 2024 to 18 March 2025.

Company Background

Wins Co., Ltd. is engaged in the business of developing and supplying information security solutions and developing software related to network security. The company was established on January 1, 2011 through the spin-off of the network security business division from Nowcom Co., Ltd. and was re-listed on KOSDAQ on May 2, 2011.

Since the early 2000s, the company has been one of the top companies in Korea to provide network intrusion prevention systems. The company also provides more complete and diverse security response measures through 24-hour remote/dispatched control services.

The company started with cloud security control services through an agreement with a large domestic cloud provider in 2014, and began our MSP business in earnest in 2020. The company provides cloud infrastructure construction and operation, security control, and security consulting to public institutions, which are the company's main customers.

Sniper One-i product (Source: Company data)

Sniper NGFW product (Source: Company data)

Wins Cloud Managed Security Service (Source: Company data)