By Park Si-soo
TonyMoly, a mid-sized Korean cosmetics company, will go public on July 10.
The firm’s subscription to its shares for an initial public offering (IPO) drew a whopping 7.6 trillion won ($6.782 billion), marking a 771:1 competition rate. The rate was the highest among share subscriptions made this year, according to KDB Daewoo Securities, the lead manager of the IPO.
“The company’s growth in China seems to have impressed investors,” said KDB Daewoo Securities analyst Chae Byung-kwon.
“Another reason may be the quality of products from the company, which is better than expected,” Chae said.
Analysts said the IPO will give TonyMoly great momentum to facilitate its expansion into China and other countries.
“A successful IPO will pave the way for the company to become the world’s leading cosmetics brand,” said TonyMoly CEO Bae Hae-dong. “China is crucial for our globalization. So we will make all-out efforts to make a success there.”
Its IPO plan has drawn keen attention from investors because of rising demand for Korean cosmetics products in China and other Asian markets. TonyMoly has reported double-digit growth in sales in recent years.
If TonyMoly’s IPO goes successfully, it will inspire many other mid-sized cosmetics firms here to follow suit.
Nature Republic, It’s Skin and several other companies have already taken steps to go public ― on domestic and overseas bourses.
Nature Republic is making last-minute preparations for an IPO in cooperation with Daishin securities. The company may list its shares on the Hong Kong stock market.
AmorePacific’s impressive performance last year triggered the IPO rush. The nation’s biggest cosmetics firm posted record sales last year, making its leader Suh Kyung-bae Korea's richest man in stock value as of Friday, edging out Samsung Electronics Chairman Lee Kun-hee and other billionaires.
Founded in 2006, TonyMoly reported 205.1 billion won in sales last year, up 20.6 percent from 2013.
It runs nearly 600 outlets here and hundreds of others in 20 countries, including the U.S. and Hong Kong.
It aims to reach 400 billion won in sales this year on robust sales in China.