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| Product image of Manyo Factory / Courtesy of Manyo Factory |
Green light for cosmetics companies awaiting IPO in H2
By Anna J. Park
Cosmetics company, Manyo Factory, made a successful debut on the Kosdaq market, Thursday, with its stock price finishing at 41,600 won ($31.80), up by the 30 percent daily limit.
According to the bourse operator, Korea Exchange (KRX), the opening price of Manyo Factory stocks was set at 32,000 won at the beginning of the day's trading session at 9 a.m., which is double the price of the initial offering subscription of 16,000 won.
The opening price is determined based on pre-orders made from 30 minutes before the start of the trading session until the session opens.
Thus, the stock price succeeded in rising by 160 percent from the initial subscription price, which is the maximum possible increase of a share's value on the Korean stock market on the IPO day.
The cosmetics company's IPO success was somewhat predicted, as the firm recorded the highest subscription competition rate among companies that went public this year. Institutional investors from both in and outside of the country flocked to the stock's two-day book-building process in late May, recording a 1,800.47:1 competition rate. Retail investors also rushed during the subscription period, posting a 1,265.33:1 rate.
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| Promotional image of Manyo Factory at its website / Courtesy of Manyo Factory |
Founded in 2012, Manyo Factory has grown to be a power seller of cleansing oil products. L&P Cosmetics, the owner of the brand Mediheal, owns a 76.48 percent stake in Manyo Factory as of the end of last year, as it took over the firm in 2018.
As Manyo Factory's strengths lie in cleansing products, it could log steady growth even during the pandemic period. The company posted a record-high annual revenue of 101 billion won in 2022, a 63 percent jump from the previous year. The firm plans to invest the capital raised through the IPO in expanding global markets and product lines.
The IPO success of Manyo Factory raised market expectations over other cosmetics firms that are waiting for their public offering during the second half of this year. Cosmetics and fashion company APR, BeautySkin, cosmetics ingredient business AStech, and beauty product store CJ Olive Young are all slated to push forward IPO later this year.
Market watchers view that local cosmetics brands will log solid growth during the second half of this year, with both global tourist demands and reopening benefits positively impacting the industry.
"As the lift of mandatory mask wearing in the country increased demands for make-up products, cosmetics brands as well as ODM-OEM firms that manufacture products for the brands are showing a strong recovery in earnings," Park Hyun-jin, an analyst at Shinhan Securities, said.
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