2024 IPO market faces strong outlook with big-name companies on deck
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The initial public offering (IPO) market in Korea is forecast to be robust throughout 2024, as a spate of big-name firms estimated to be worth trillions of won in their respective market capitalization will go public.
Investors are also upbeat about the market because the price cap for a newly listed stock on the day of debut was hiked since June last year and that the stock can be traded at as much as four times higher than its IPO price.
According to Eugene Investment & Securities, 140 to 150 companies are expected to make a debut on the stock market and raise some 8 trillion ($6.06 billion) to 10.5 trillion won.
“It can be said the 2024 IPO market will feature an increased number of lager firms than last year’s and the market will get bigger in its size,” a report by Shinhan Securities noted.
Daishin Securities voiced a similar view, noting in its report that several affiliates of conglomerates are "anticipated to join the IPO rush after contemplating for years.”
A promotional image of beauty tech device manufacturer APR / Korea Times file
Of the planned mega-listings, APR, a Seoul-based startup, possibly draws most attention as it rose to global fame a little less than 10 years after it set foot in the beauty devices, cosmetics and sports apparel manufacturing businesses.
The company reported over 120 billion won in sales and over 20 billion won in operating profit for the fourth straight quarter since the final three months of 2022.
In the first three quarters of 2023, the firm’s sales jumped 37.9 percent year-on-year to 371.8 billion won while its operating profit surged 277 percent year-on-year to 69.2 billion won.
The company plans to go public on the benchmark KOSPI.
It is scheduled to go on a two-day public subscription period for retail investors on Feb. 1 and will offer 379,000 shares, with each stock estimated to be priced in a range of 147,000 won and 200,000 won.
“The company is expected to be worth around between 1.11 trillion won and 1.51 trillion won after going public,” Shinhan Securities and Hana Securities jointly said as co-underwriters of APR’s IPO.
Executives of HD Hyundai Marine Solution, HD Hyundai Group and Korean Register pose after HD Hyundai Marine Solution was given an official approval from the Korean Register on the design of ships using methanol as a marine fuel in this photo taken on Dec. 23. Yonhap
Also drawing attention on the IPO market is HD Hyundai Marine Solution, a spin-off company from HD Hyundai Group in November 2016.
Specialized in maintenance, repair and facelift of ships, HD Hyundai Marine Solution is currently undergoing preliminary examination by the Korea Exchange on its path to be listed on the KOSPI, possibly in the first half.
Its annual sales totaled at 1.33 trillion won in 2022, a 555 percent increase from 2017 when it was at its nascent stage of business. Over the same time period, its operating profit also jumped 260 percent to 142 billion won.
The company is anticipated to reap higher earnings this year, as the shipbuilding industry has entered the so-called super cycle of high demand and 58 percent of the vessels that operated for 20 years or longer will be repaired or replaced with new ones.
The demand for ships is also high because many advanced countries are calling for environmentally friendly shipping and trade and that vessels are newly built or revamped to comply with the green campaign.
HD Hyundai Marine Solution is anticipated to offer 4.44 million shares, and its market capitalization is anticipated to be about 3 trillion won when it makes its IPO debut.
A contractor of steel giant POSCO, PLANTEC plans to return to the KOSPI after it struggled with losses and was delisted in April 2016.
It trimmed down its businesses following a workout, focusing on maintenance and engineering services in the field of steel plants.
In turn, it posted about 300 billion won in sales and about 20 billion won in operating profit for each 2020 and 2021.
Its sales surpassed a 500 billion won mark in 2022. The company is highly expected to repeat such achievement in 2023 considering its sales already reached 499.5 billion won in the first three quarters of the year.
Multiple brokerage houses speculate prospective tech firms and startups whose IPO plans last year was disrupted by the pandemic plan to be listed in 2024.
Among them are CJ Olive Young and SSG.com, both retail giants, and Viva Republica, the operator of financial technology app Toss.
Industry sources view the hiked price cap for a newly listed stock can especially enliven the IPO market and attract retail investors.
They referred to an eased regulation in June 2023, under which the price of newly issued stocks was given more room to move upward on the first trading day and thus bring higher return for investors.
The authorities raised the limit of the quotation price for the stock a range of 60 percent to 400 percent, compared to 63 percent to 260 percent, meaning that the prices can quadruple in a single day.