[IPO] 10 trillion won in deposits and 408:1 competition ratio... Will Elice Group maintain its 1 trillion won valuation?

Elice Group, which has shifted its business focus from an AI education platform to a cloud infrastructure company, is facing a test of its corporate valuation ahead of its KOSDAQ listing. While expectations for expanded AI infrastructure investment and business restructuring are reflected in the offering price, the key investment point is whether it can maintain this valuation after listing.

According to the investment banking (IB) industry on the 8th, Elice Group recorded a final competition ratio of 408.26 to 1 in the public offering subscription for general investors, which was conducted for two days starting from the 7th. The number of subscription cases is estimated at 289,418, and the deposit is estimated at approximately 10,260,000,000,000 won.

Through this initial public offering (IPO), Elice Group is offering a total of 2,222,000 new shares. Through a method of entirely issuing new shares, 555,500 shares, which is 25% of the total offering shares, were allocated to general investors. The finalized offering price is 90,500 won, and the total offering amount is approximately 201.1 billion won. Mirae Asset Securities served as the lead manager, and Samsung Securities served as the joint manager.

The expected market capitalization based on the offering price is 1,007,200,000,000 won. This amount is calculated based on the 11,128,864 shares scheduled to be listed as stated in the corrected securities report. Elice Group is scheduled to be listed on the KOSDAQ Market on the 20th.

◆ While the acceptance of the offering price was high... commitment rates and floating volume are variables

Previously, during the demand forecasting for institutional investors conducted from the 23rd of last month to the 1st of this month, a total of 2,367 institutions participated. The number of requested shares was 648 million shares, and the competition ratio recorded 388.84 to 1. Looking at the distribution of requested prices, 97.8% of the total requested shares were concentrated at or above the upper end of the desired band (70,400–90,500 won). This means the institutions' price acceptance helped finalize the offering price at the upper end of the desired range. However, the mandatory holding commitment ratio was only 13.7% based on the requested quantity.

The number of shares available for circulation immediately after listing is 2,311,880 shares, which accounts for 20.77% of the total scheduled shares to be listed. While the floating ratio itself is at the level of one-fifth of the total shares, when converted to an amount based on the offering price, it corresponds to approximately 209.2 billion won. This could affect the stock price trend depending on the actual selling volume after listing.

Additional volume due to the release of lock-up periods is also a factor to consider. According to the securities report, the cumulative floating shares will increase to 3,640,031 shares (32.71%) after 1 month of listing, 3,743,065 shares (33.63%) after 3 months, and 5,738,700 shares (51.57%) after 6 months. In particular, after 6 months of listing, more than half of the total shares will be included in the floating volume.

Ultimately, Elice Group's corporate valuation after listing is expected to depend on whether growth expectations for the AI infrastructure business lead to actual performance, along with how long the investment demand formed at the offering price level will persist.

Since its establishment in 2015, Elice Group has expanded its business centered on the cloud-based education platform 'Elice LXP'. It has secured major companies such as Samsung, SK, and Hyundai Motor Company, as well as public institutions, as clients, and recently has expanded its field into the GPU cloud business based on server virtualization and distributed processing technologies accumulated during the operation of its education platform.

Currently, the business is divided into the AI Transformation (AX) and cloud sectors. The AX sector is responsible for AI education, consulting, and solution development for companies and public institutions. The cloud sector provides high-performance graphics processing unit (GPU) computing resources required for AI model training and inference. Customers can use the service by paying based on usage or contract period instead of purchasing GPUs directly.

The business structure transition is also evident in the revenue composition. The proportion of cloud revenue increased from 6.60% in 2023 to 8.54% in 2024, and to 44.18% in 2025, and expanded to 76.20% in the first half of this year. The revenue base has moved from the existing education-centered business to an AI infrastructure-centered one.

The core infrastructure supporting the cloud business is the self-developed modular AI data center 'AI PMDC'. It is designed to shorten the construction period and allow for stepwise expansion by configuring the power, cooling, and network facilities required for GPU server operation in a modular form. It is also characterized by efficiently operating computing resources using the self-developed GPU virtualization solution 'ECI'. However, as GPU and data center facilities must be secured preemptively, if demand does not meet expectations, the burden of fixed costs such as decreased utilization rates and depreciation may affect profitability.

◆ Shifting focus to AI infrastructure, a test of growth sustainability

With the spread of generative AI and the advancement of models, demand for GPUs and data centers is on an increasing trend. In South Korea, as the government supports the securing of AI computing resources and infrastructure construction, business opportunities for related companies are expanding.

Following its selection as a supplier for government AI computing-related projects in 2025, Elice Group is also participating in the National AI Data Center Advancement Project and the AI Computing Resource Utilization Infrastructure Enhancement Project this year. While government-led projects are contributing to the expansion of cloud revenue, it is a burden that performance may be affected by policy changes or budget execution schedules. This is why expanding the supply of GPU clouds to private companies is necessary.

Intensifying competition and technological changes are also risk factors. In the global market, businesses with strong capital, such as CoreWeave and Nebius, are competing to secure GPUs. Rising GPU procurement costs or supply delays can act as a burden on infrastructure construction, and additional investment is also required to respond to rapid technological changes.

Elice Group is also pursuing a new business of selling AI PMDC itself to customers. However, as it is still in the early stages, uncertainties remain regarding actual orders, revenue expansion, and the securing of profitability.

Elice Group's consolidated revenue for the first half of this year was 34.4 billion won, an increase of 202.18% compared to the same period last year, achieving approximately 87% of last year's annual revenue. The increase in GPU cloud revenue following the government's AI infrastructure expansion projects drove external growth.

Profitability showed high volatility. The operating profit margin fell from 40.92% in 2023 to 13.12% in 2025, before improving to 30.10% in the first half of this year. While the burden of fixed costs, such as depreciation due to expanded investment in GPUs and data center facilities, affected profitability, the burden of fixed costs was diluted this year due to the increase in revenue. However, since the first-half revenue includes 23 billion won recognized as revenue from existing contract liabilities, it is necessary to monitor whether the growth trend can be maintained through new orders in the future.

Revenue concentration is also an area to examine. In the first half of this year, revenue from one major customer was 22.5 billion won, accounting for 65.6% of the total. While cloud revenue is expanding rapidly, centered on government projects, the concentration of revenue on a specific client could increase earnings volatility depending on changes in contract scale or business schedules. This is why diversifying the revenue base by securing private sector customers is necessary.

Financial burden is also increasing due to large-scale facility investments. At the end of the first half of this year, short-term borrowings were 35.5 billion won, an increase of 7.5 billion won from the end of last year, and the current ratio fell from 74.82% to 52.32%. During the same period, cash and cash equivalents also decreased from 51.1 billion won to 22.5 billion won. While cash flow from operating activities recorded a net inflow of 6.6 billion won in the first half, there was a net outflow of 41.9 billion won in investing activities. As large-scale infrastructure investment is scheduled for the future, the key will be whether the secured facilities can lead to stable revenue and cash generation.

Elice Group plans to invest the entire 200.9 billion won in net proceeds secured through this public offering into building AI cloud infrastructure. It will build 4 modules of 'AI PMDC', a modular AI data center, in the Seoul metropolitan area and 8 modules in the Honam region, and will also expand related facilities such as power and cooling. The allocated funds are 28.7 billion won for the metropolitan area center and 172.3 billion won for the new Honam region center.

The two centers have different construction purposes. The metropolitan area center focuses on performing the government's AI Computing Resource Utilization Infrastructure Enhancement Project, while the Honam region center will play a role in responding to the GPU cloud demand of private companies. In particular, the GPU servers for the Honam region center are planned to be secured in stages in accordance with customers' long-term use contracts and introduction schedules. The company plans to raise funds required for additional investment through its own held cash and borrowings from financial institutions.

Read the original (Korean)