Three men, working in a cheap hotel room… 2.3 billion jackpot hit

Domestic Internet infrastructure leader
Visit KINX’s new headquarters
CEO Jiwook Kim’s first interview of the year

Seeing is worth seeing. It is better to see something once than to hear it a hundred times. In order to alleviate the information imbalance amidst the flood of fake news, a ‘fighter ant’ with 18 years and 2 months of stock investment experience directly visits listed companies. Review the company’s business status, meet with management, and resolve investors’ questions. ‘Battle ants’ is a word he usually uses to describe a situation in which he invests in stocks to win every time, based on the idea that ‘stocks are a battlefield.’ I am well aware that the pain of loss when investing in stocks is greater than that of anyone else, so I am writing this article today from the perspective of an individual investor.

Kim Ji-wook, CEO of KINX, is shouting to fight after an interview with the Korea Economic Daily. Gwacheon = Reporter Hyunjoo Yoon “The Gwacheon Data Center, which was completed last August, will be ready for customer occupancy in November after going through a ‘stress test (reliability verification evaluation).’ “We will become a competitive supplier in the metropolitan area data center market, where demand is rapidly increasing due to the expansion of the cloud market and the spread of artificial intelligence (AI) and big data.”

Panoramic view of KINX Gwacheon Data Center, where 160 billion won was invested. Gwacheon = Reporter Yoon Hyun-ju Kim Ji-wook, CEO of KINX (born in 1971), expressed confidence in the new food product for which about 160 billion won was invested on the 25th. The Gwacheon Data Center will provide cutting-edge infrastructure and customized services, and is negotiating to attract famous overseas IT companies. The goal is to reach an 80% operation rate by the end of next year, and when it operates at 100%, it is expected to generate annual sales of about 40 billion won from space usage fees. A data center is a building dedicated to computer rooms that provides the optimal infrastructure environment required to operate computer equipment such as servers, storage, and Internet communication equipment. In the industry, it is sometimes compared to a ‘server hotel’. The Internet Data Center (IDC) service charges a space usage fee every month according to the quantity of the customer’s computer equipment and the amount of power required, and a line usage fee is charged every month based on the customer’s computer equipment and the amount of Internet traffic due to additional connections at home and abroad based on domestic and domestic Internet users. . This is KINX’s main source of income.

Employees from the finance and human resources general affairs teams are working. Gwacheon = Reporter Yoon Hyeon-joo The Gwacheon data center is 20MW, which is about 2.5 times the size of the entire data center operated by KINX. It can be viewed as a network platform center that can intensively use all types of network services required for corporate IT infrastructure. The advantage is that it can meet the needs of various customers through a neutral network platform that can conveniently connect without restrictions to domestic and foreign Internet service providers (ISPs), cloud service providers (CSPs), and content delivery network (CDN) providers. The expansion of powerful network services, large-scale data halls, and high power provision has made it possible to provide a variety of options to customers.

Manager Hyunwoo Lee is checking Gwacheon IDC-related facilities. Gwacheon = Reporter Yoon Hyun-joo

Internet infrastructure service leader… Growth spurts with completion of Gwacheon Data Center

This company is a powerhouse in Internet infrastructure services that provides networks and infrastructure optimized for corporate environments. The head office is located on the 4th floor, 34, Gwacheon-daero 7na-gil, Gwacheon-si, Gyeonggi-do. Gabia, the parent company, established an integrated office building and data center for its affiliates in Gwacheon Knowledge Information Town and moved from Gangnam as a result of completing the relocation of all affiliates’ headquarters. The integrated office building has a total floor area of ​​54,725㎡ (approximately 16,500 pyeong), with 4 underground floors and 6 floors above market, and Gabia CNS, Xgate, and SPSoft will all move in and share the office space. This is CEO Kim’s first interview this year.

Unit manager Jeon Ho-kyung (left) and manager Noh Hee-jong are having tea time. Gwacheon = Reporter Hyunjoo Yoon The history of KINX began on July 1, 2000. At that time, member companies of the Korea Internet Interconnection Council established IX (Internet eXchange) corporation to technically realize neutral Internet interconnection, and this corporation is now KINX. Starting with Korea’s only neutral IX service, we have expanded our business territory to IDC since 2008. On February 8, 2011, the company was listed on KOSDAQ and stepped on the growth accelerator.

Manager Jaeyong Lee is making a sales call regarding Gwacheon IDC. Gwacheon = Reporter Yoon Hyun-joo

There has not been a single negative growth in sales for 24 years.

In 2012, based on a stable network, CDN and cloud service ‘IXcloud’ were added to provide more diverse infrastructure services. In addition, it launched Korea’s first cloud connection platform ‘Cloud Hub’ in 2017 and video management solution ‘Midibus’ in 2018, further solidifying its status as an Internet infrastructure specialist company. It is known that thanks to these efforts, there has not been a single episode of negative growth since the company was founded in 2000.

Manager Seunghyun Lee is writing a sales proposal. Gwacheon = Reporter Hyunjoo Yoon CEO Kim said, “We are currently doing our best to increase the Gwacheon data center operation rate. Next year’s contract rate is expected to be 100%, but the operation rate will be about 50%.” The reason is that customers do not immediately use the data center just because they sign a contract. CEO Kim added, “It is difficult to accurately predict the size of sales because network usage fees are determined by the customer’s communication volume, but since usage tends to gradually increase over time after a customer moves in, we expect additional sales beyond space usage fees in the future.” .

Unit leader Yoon Min-ju is looking at the cloud excellence award. Gwacheon = Reporter Hyunjoo Yoon Expectations are high for the Gwacheon data center designed and built by KINX. CEO Kim said, “We pride ourselves on being the best network platform center in Korea that can provide neutral network services and a flexible infrastructure environment.” He added, “Through neutral network services, customers can connect with various line operators, and by providing flexible infrastructure, we can provide a flexible infrastructure for corporate IT environments.” “You can choose the most appropriate air conditioning and power provision method,” he explained. He continued, “The Gwacheon Data Center guarantees the highest level of availability in Korea (up to 99.9999%) by duplicating major facilities such as power, air conditioning, network, and firefighting, and is capable of providing high power of 20kW or more to accommodate customers who want to build infrastructure for AI workloads. “It is also possible,” he added.

Manager Seong Hyun-seon (left) and Lee Seung-jun are holding a cloud development meeting. Gwacheon = Reporter Hyunjoo Yoon All of KINX’s data centers are connected through a dedicated network (DCI), so customers can use all services provided by the company no matter which center they move into. CEO Kim explained this as “high network integration.” As a result, customers residing in the Gwacheon data center are provided with an expanded network and can connect with various domestic and foreign entities. The company provides services by renting centers from IDC operators in the Gasan, Sangam, and Bundang areas, focusing on its own center, Dogok Center. Including global network bases in Japan and Hong Kong, the company operates a total of seven data centers.

Manager Jangwon Yoon is developing the IX Cloud Manager page. Gwacheon = Reporter Hyunjoo Yoon CEO Kim said, “Once you enter the Gwacheon data center, you can be connected to all networks in Korea. This competitiveness has the effect of saving customers money and time.” He went on to explain, “We are a ‘one-stop server hotel’ where you can connect content for free by connecting just one line, without any additional costs.”

KINX is preparing a data hall. Gwacheon = Reporter Yoon Hyun-joo

Competing with IDC with high network integration… “It will resemble the U.S. Equinix”

CEO Kim declared, “Rather than a general IDC that generates sales by supplying power to servers and leasing space, we will increase network integration by creating an IDC that specializes in networks.” We plan to increase the number of connection points with more ‘DCI pop-up stores’ next year. KINX is evaluated as having a similar business model to the US data center REIT Equinix. CEO Kim said, “Our primary goal is to become the best neutral IDC and IX (Internet Exchange Facility) service provider in Korea and to become a company that can provide neutral services to global customers like Equinix, the No. 1 global service provider.” And gave strength. As of the 27th, Equinix’s market capitalization is $86.8 billion (about 120 trillion won).

A comprehensive management room that manages network servers, etc. Gwacheon = Reporter Hyunjoo Yoon CEO Kim is also accelerating the cloud hub service business. This service, a cloud connection platform provided by IDC, is growing rapidly thanks to the rapid growth of the domestic cloud market. It is connected to the largest CSPs in Korea, including major cloud providers such as Amazon Web Services (AWS), Google, Oracle, Naver, and NHN. By connecting to KINX Cloud Hub, you can connect quickly and safely to major CSP resources and high-quality networks, and you can easily configure multi-cloud that uses two or more clouds simultaneously. It is also possible to directly connect to the customer’s overseas business sites and the cloud used domestically. Since one connection can use or change various clouds, customers can save money by reducing the number of management points for connections. Cloud Hub, one of IDC’s network services, charges customers monthly based on the bandwidth they use.

Average annual sales growth rate of 17% for 5 years… “Challenge for the highest sales ever next year”

Performance over the past five years has been on an upward curve. Sales increased by 89.94% and 61.21%, respectively, from 64.6 billion won and operating profit of 16.5 billion won in 2019 to 122.7 billion won in sales and 26.6 billion won in operating profit last year. The average annual sales growth rate for five years is 17.1%. Shinhan Investment & Securities predicted sales of 132.4 billion won and operating profit of 21.6 billion won this year. Kim A-ram, a researcher at Shinhan Investment & Securities, said, “The Gwacheon Data Center is likely to secure 50% of its customers in the first half of next year, and its performance will bottom out in the fourth quarter and gradually rise,” adding, “Our estimated price-earnings ratio (PER) for 2025 and 2026 is each “If you look at the long-term ratio of 20x or 13x, it is not an expensive stock price,” he analyzed. The reason for the decrease in profits this year is due to the reflection of depreciation and normalization of service fees. CEO Kim said, “In terms of operating profit before amortization (EBITDA), profits continue to grow,” and added, “We will launch aggressive sales to record record-high sales next year.”

Manager Hojong Kim is working on the portal. Gwacheon = Reporter Hyunjoo Yoon Qualitative growth also stands out, with the average operating profit ratio for five years being 23.8%. If you earn 100 million won in sales, you will be left with 23.8 million won. As of the second quarter, the debt ratio is also low at 53%. The total number of shares is 48.8 million, and Gabia (36.30% stake) and 5 related parties own 39.87% of the shares. Utilico Emerging Markets Trust PLC, a British infrastructure investment agency, owns a 5.29% stake. The treasury stock is 0.88%, foreign ownership is 27.55% (including the second largest shareholder), and the distributed volume is less than 30%.

Manager Kim Ha-yan is holding up the Youth-Friendly Small Giant Company plaque. Gwacheon = Reporter Hyunjoo Yoon As of the second quarter, cash assets amounted to KRW 88.9 billion (including short-term financial products) and tangible assets amounted to KRW 164.9 billion. Last year, the dividend per share was 600 won, recording a market dividend rate of 0.60%. When asked about the stock price stimulus plan, he said, “The current dividend policy aims to pay dividends within 15% of net profit on a separate basis,” and added, “It is difficult to change the current dividend policy in a short period of time as the amount invested in the Gwacheon data center in the short term is significant. “It is,” he answered. He continued, “If sales and operating profits increase significantly due to the Gwacheon Data Center, etc., the dividend amount will also increase,” and added, “We will strive to increase the profits of shareholders along with the sustainable growth of the company.”

The stock price (70,900 won on the 25th) fell 45.67% compared to the previous point (130,500 won on January 22nd). A positive factor for investment is that demand for data centers continues to increase. CEO Kim said, “Internet infrastructure services based on data centers and communication lines that we operate have no choice but to grow rapidly,” and added, “We will do our best to generate an operating profit of more than 20% based on EBITDA.” However, it should be noted that sales may fluctuate depending on intensifying competition in data centers and customer contract terms.

Manager Ye-seul Kim (left) and other employees are using the in-house cafe. Gwacheon = Reporter Hyunjoo Yoon After being appointed as co-CEO in 2018, CEO Kim, who has successfully won three consecutive terms and is establishing a management strategy for the seventh year, currently owns 33,000 shares of KINX and is worth 2.3 billion won (as of the 27th). He started out as an ordinary office worker and became a man with assets worth billions of won. He first encountered IDC when he joined Daewoo Motors in 1999 and then transferred to the Internet business team at KT Hitel in 2000. He joined KINX in 2003 and was later in charge of the domestic sales headquarters before being transferred to the one-person overseas business team in 2010. CEO Kim said, “At the time, the company’s overseas sales accounted for 1-2%, and it was really not easy to leave the domestic sales infrastructure that we had built over the past 7 years and go overseas and start over.”

IX Cloud development staff are concentrating on their work. Gwacheon = Reporter Yoon Hyun-joo

“Three men worked in a cheap hotel room in Southeast Asia… “Opening despite floods in Indonesia”

He left with the challenge of making it a success at all costs, and took advantage of Southeast Asia to attract overseas customers. CEO Kim recalled the past, saying, “Due to cost issues, I couldn’t even dream of flying a national airline at the time,” and “Three men stayed in a cheap hotel room in Southeast Asia and focused on sales activities.” He said that the hotel was based on double occupancy, so if you requested an extra bed and entered the room, it was so narrow that there was no room to move. My two teammates and I often went to a food court where meals were relatively inexpensive. CEO Kim said, “At this time, I think I was able to get to where I am today by successfully securing business opportunities with telecommunication operators in Thailand, Malaysia, Indonesia, Hong Kong and Singapore with my team members.” He said the most memorable thing was the Indonesia Telecommunications Expo. He recalled, “I caught a taxi to go to the event venue and arrived on time despite heavy rain due to a large flood, but I was embarrassed because the local officials did not arrive.”

CDN development group employees are having a business meeting. Gwacheon = Reporter Yoon Hyeon-joo When asked to give life advice, he said, “We can gain greater momentum when we feel connected to each other in more relationships and confirm that we are contributing to something more important than ourselves.” He added, “Reciprocal relationships are based on trust.” “It is the basis of and these signals can increase your reputation and consequently receive more help.” He then emphasized, “As selfish altruists, I hope that we will look at our surroundings, share concerns about our own values, and create a life together.”

Manager Yang Ji-seon is explaining the meaning of the completion of the Gwacheon Data Center. Gwacheon = Reporter Yoon Hyun-joo, Growth Research CEO Lee Jae-mo said in a call with a reporter on the 27th, “Data center traffic is rapidly increasing due to the expansion of AI and cloud demand,” and “We can expect KINX’s sales to grow with the expansion of the Gwacheon data center.” and analyzed. However, he pointed out that “the dividend payout ratio is about 12%, which means shareholder return is insufficient compared to cash flow and profitability.” He said, “The capital reserve ratio is over 7,000%, but it is like stockpiling capital without investment.” He added, “Given the nature of the business, which does not require large investment costs other than the cost of building a data center, an active shareholder return plan seems necessary to use cash resources efficiently. “He advised.

I will run with ‘14 million ants’. I will write a lot of interesting stock articles until the day your stock account turns red. If you click Subscribe and Support Reporter Hyunjoo Yoon on the reporter’s page below, you will be able to check the articles quickly every time.

Gwacheon = Reporter Hyunju Yoon [email protected]