First Half Public Offering Market Report 'Favorable'... 75% Surpass Offering Price

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[Asia Economy Reporter Kum Bo-ryeong] It has been revealed that 75% of the companies that successfully went public in the stock market in the first half of this year posted favorable results.

According to the Korea Exchange on the 1st, among the 12 newly listed stocks in the first half of this year (excluding SPAC mergers), 9 stocks, except for Kenko Aerospace, NPD, and Zencurix, closed above their offering prices based on the previous day's closing price.

The best performer was Seoul Viosys, which was listed on the KOSDAQ market on March 6. Although the offering price was 7,500 KRW, it grew by 132.67% over about four months, closing at 17,450 KRW the previous day. It was followed by Lemon (125%), LIT (113.46%), SCM Life Science (59.12%), and DreamCIS (56.71%).

They showed a smooth start from the beginning. All nine stocks that closed above their offering price had their offering prices set at or above the upper limit of the expected offering price band. Except for JNTC (-7.27%) and NPD (-10%), 10 stocks, accounting for 83.3%, rose compared to their offering price at the opening price.

The highest subscription competition rate was recorded by LIT at 1,552.16 to 1. Wise I-Tech also showed 1,076.62 to 1, followed by Seoul Viosys (942.70 to 1) and SCM Life Science (814.91 to 1).

The number of listed stocks itself has significantly decreased compared to last year. This is due to the global economic contraction following the COVID-19 pandemic, which rapidly cooled down the initial public offering (IPO) market. In the first half of last year, 18 stocks entered the market, with two listed on the KOSPI market, whereas in the first half of this year, no companies were listed on the KOSPI market. The IPO public offering scale also shrank to about 365 billion KRW. Considering it was close to 1 trillion KRW in the first half of last year, this represents a decrease of over 60%.

The public offering market is expected to improve in the second half. SK Biopharm, which is about to be listed on the KOSPI market, succeeded in attracting 31 trillion KRW in subscription deposits, and major companies such as Big Hit Entertainment and Kakao Games are planning to go public.

Lee So-jung, a researcher at SK Securities, analyzed, "It is expected that some of the 30 trillion KRW refunded to general investors from SK Biopharm will flow back into general public subscription investments, increasing subscription competition rates. Especially, since it is advantageous to be listed in the second half of this year when liquidity is abundant, it is judged that the number of companies advancing the timing of their public offering procedures will increase." As many as 31 companies have already submitted preliminary review applications in the first half.