Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Will K Auction's listing to threaten Seoul Auction's bullish run?
K Auction's headquarters in southern Seoul / Courtesy of K Auction
By Anna J. Park
By Anna J. Park
With K Auction set to go public next month, market watchers are paying attention as to whether its competitor, Seoul Auction, which has been enjoying a bullish run throughout the past year, will be affected by the listing.
According to K Auction's prospectus submitted to the Financial Supervisory Service (FSS), the auction house plans to offer 1.6 million shares in an initial public offering (IPO) to raise up to 32 billion won ($27 million) on the secondary Kosdaq market.
As the target offering price is set between 17,000 won and 20,000 won, the company's market cap is estimated to be around 151 billion won and 178 billion won.
The company is scheduled to confirm the IPO price next month, after a two-day subscription survey among institutional investors in early January. Shinyoung Securities is the main underwriter of the IPO.
Launched in 2005, the auction house started off the country's very first online fine arts auction house in 2006.
“Based on auction system established by K Auction, we hope to contribute to building the country's arts auction scene more transparently and healthily,” K Auction CEO Do Hyun-soon said. “The company plans to solidify its status as the country's representative auction house through the IPO,” the CEO added.
K Auction had about a 42 percent share in the local arts auction market as of the end of the first half of the year, slightly lower than the share of Seoul Auction with 48 percent.
While K Auction is aiming for a market cap of up to 170 billion won through the IPO, Seoul Auction's stands at around 490 billion won as of Wednesday.
Since making its stock market debut in July 2008, Seoul Auction's market cap has more than tripled over the past year, as its stock price enjoyed a bullish run.
Its stock price has risen from 7,110 won in early January to 28,900 won as of Wednesday's close, amid growing interest in art, as well as the global fever over investing in non-fungible tokens (NFT). Seoul Auction's stock price was stoked as it expanded its partnership with blockchain company Dunamu for the NFT business in May this year. The price soared again in October as one of the auction house's subsidiaries launched NFT services on digital platforms.
Seoul Auction's impressive performance in the stock market affected K Auction's offering price and market cap positively.
“When limited to the local auction market, K Auction is in an inferior position to its competitor, Seoul Auction. However, general improvements in the fundamentals and the auction businesses' industrial growth amid the pandemic are expected,” Lee Seung-woo, an analyst at DB Financial Investment, said.
DB Financial, which publishes reports on private companies, selected K Auction as one of the most anticipated IPOs last month.
“Amid low interest rates, the fine arts have emerged as a viable financial asset investment for retail investors. With the core customer base having expanded, the local arts market is expected to enter a growth period,” Lee Sang-heon, an analyst at Hi Investment & Securities, also pointed out.
The remaining question is how K Auction's imminent listing on the Kosdaq will affect Seoul Auction's market value and stock price.