Doosan Bobcat to debut on Seoul bourse

By Nam Hyun-woo

Doosan Bobcat Chief Financial Officer Kim Jong-seon speaks at a press conference in Yeouido, Seoul, Thursday. / Yonhap

Doosan Bobcat, a leading construction equipment maker, announced Thursday that it will debut on the Korean stock market through an initial public offering (IPO).

The IPO has garnered attention as it is expected to raise 2.45 trillion won, the second largest following Samsung Life which raised 4.8 trillion won in 2010.

In a press conference on Yeouido, Seoul, Doosan Bobcat Chief Financial Officer Kim Jong-seon said the IPO will serve as a stepping stone for the company to expand its presence in emerging markets.

“When Doosan Infracore announced its acquisition of Bobcat, the former said it will normalize Bobcat’s business and go public at the appropriate time,” said Kim. “Since the U.S. housing market is showing a turnaround, the company saw this as the right time. Through the IPO, Doosan Infracore will improve its financial structure.”

“In order to consolidate our market status, we believe improving our presence in emerging markets, such as China and Latin America, is crucial. That is why we established the company’s headquarters in Seoul and are seeking a listing on the Korean bourse.”

Doosan Bobcat will list 49 million shares at a price between 41,000 won to 50,000 won. After receiving subscriptions from investors next week, the company will be listed on the benchmark KOSPI, Oct. 21.

After being acquired by Doosan Infracore in 2007, the U.S.-based company showed continued growth from 2011 to 2015, with its average operating margin growing 24.7 percent annually. Last year, Doosan Bobcat posted $3.57 billion in sales, the largest since it was acquired by Doosan, and its operating margin stood at 9.5 percent.

The company’s business portfolio is based on its dominance in skid-steer loaders, compact track loaders and mini excavators in the North American market. Each equipment's market share in North America and the Oceania region is 41 percent, 31 percent and 24 percent, respectively.

During the conference, Kim stressed that the company expects a rosy future, as it is affected by the U.S. housing market.

“In the North American region, single-family houses are mostly seen and such units’ constructions are done by compact equipment such as loaders,” said Kim. “The number of single-family house constructions in the U.S. is expected to grow. Though it does not necessarily mean Doosan Bobcat’s business will follow suit, it allows the company to hold a lucrative outlook.”

According to data from the U.S. Census Bureau, the number of newly constructed single-family housing units dropped from 1.72 million in 2005 to 445,000 in 2009, in the wake of the global financial crisis. However, the number has been showing a steady increase to reach 713,000 in 2015, with the company expecting 1.05 million in 2018.

Doosan Bobcat’s IPO will be one of three by heavyweights that will go public on the local bourse this year.

Earlier this week, Samsung BioLogics submitted a plan for listing to the Financial Supervisory Service and the Korea Exchange (KRX). The plan states that it will list 16.5 million shares at a price ranging from 113,000 won to 136,000 won. After opening subscriptions for shares on Nov. 2, the company plans to complete the IPO by the end of the next month at the latest, raising between 1.87 trillion won and 2.25 trillion won.

Netmarble Games, Korea’s leading online game developer and publisher, held a board meeting last month and submitted its listing plan for KRX’s preliminary screening. The company seeks to wrap up its IPO as late as early next year and hopes to raise 2 trillion won.