Korea's Oasis scraps IPO despite being profitable

Oasis cancelled its IPO Monday. [OASIS]

Oasis has cancelled its IPO on weak demand for the stock of the profitable e-commerce company.

“The IPO market is retracting due to global economic slowdown and negative investor sentiment,” Oasis said in a statement. “Therefore, it’s difficult for our company to get proper market valuation. Oasis, as the sole profitable e-commerce company, does not need to strain itself to become listed when it already has the finances for sustainable development, so we decided to cancel our listing.”

Oasis was set to list on Kosdaq on Feb. 23 in an offering that could have raised as much as 206.8 billion won ($162 million). Market value was set between 967.9 billion won to 1.25 trillion won.

“The biggest benefit we reaped during IPO process is that we gained positive evaluation on company’s distinctive competitiveness and growth plans,” said Oasis’s CEO Ahn Jun-hyung. “We aim to become a leading e-commerce company with expertise of bringing quality organic food at reasonable prices, leveraging our advanced logistics technology.”

Press reports say that indicative pricing came in below the expected range.

Founded in 2011, Oasis started off by focusing on developing and selling organic goods through physical stores. It expanded its business to dawn deliveries and online sales with Oasis Market in 2018.

Ahn emphasized that the company’s edge lies in fresh products and in-house organic brands, which account for 60 percent of the total revenue.

Oasis reported a net profit of 3 billion won in third quarter, an increase of 43 percent on year. Operating profit was 7.7 billion won and revenue was 311.8 billion won.

The company aims to increase its membership to 10 million from the current 1.3 million, noting its ability to make profits even with a low number of members.

Oasis was set to become the first domestic e-commerce operator to go public as other companies, such as Kurly and SSG.com, have either postponed or canceled its IPO.

Coupang, another major e-commerce operator, listed on the New York Stock Exchange in 2021.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]