SK Biopharm, CJ Healthcare, Kakaobank to lead IPO market in 2020

By Baek Byung-yeul

SK Biopharmaceuticals, CJ Healthcare, Kakaobank and other budding companies are in the pipeline for their initial public offerings (IPOs) in 2020, raising hopes they will heat up the country's stock market, according to market analysts Friday.

Companies go public to raise capital to further their growth. According to the Korea Exchange, 108 companies conducted IPOs in 2019, and the amount of money raided by the IPOs was around 4 trillion won ($3.4 billion).

Analysts expect the IPO market will see some major growth in 2020 as a number of big companies are getting ready to go public.

SK Biopharmaceuticals is anticipated to become the biggest listing IPO in two years as the SK Group affiliate already applied for a preliminary IPO review application in October.

The company has raised its value before the IPO after it gained approval from the U.S. Food and Drug Administration (FDA) in November for its antiepileptic drug.

“SK Biopharmaceuticals is expected to launch an IPO within the first half of 2020. Though the company's value is not decided yet, its anti-epileptic drug is estimated to be worth about 5.5 trillion won, so the market capitalization of SK Biopharmaceuticals will be between 6 trillion won and 8 trillion won,” said Seon Min-jung, an analyst at Hana Financial Investment.

CJ Healthcare is another biotech company expected to publish an IPO in 2020.

The company, which cosmetics and pharmaceuticals contract manufacturer Kolmar Korea acquired in April 2018 for 1.31 trillion won, sells items including kidney disease treatment drugs, anti-hangover drinks and other beverage products.

In preparing for the IPO, the company has named Samsung Securities, Korea Investment & Securities and JP Morgan as book runners. Those book runners have reportedly put the IPO value of CJ Health at between 1.5 trillion won and 2 trillion won, which is higher than the acquisition cost.

In other industrial sector news, internet-only bank Kakao Bank is expected to boost the IPO market in the new year.

Analysts forecasted the internet-only bank will file for an IPO in 2020 to compete against traditional lenders and its rival digital banks such as K bank and the Toss Bank consortium, which received a preliminary approval from the Financial Services Commission recently for a license to operate a new internet-only bank, the third of its kind here.

“Kakao Bank will draw attention from investors regarding the IPO and the valuation in 2020. Though the bank recently increased its capital by issuing new stocks, Kakao Bank will likely need to issue more new stocks in the first half of 2020, taking account of its fast-growing financing and loan business. The internet-only bank is estimated to be valued at more than 4 trillion won,” said Kim Jae-woo, an analyst at Samsung Securities.