[Exclusive] SM Shipping Submits Preliminary Review Request for KOSDAQ... "Corporate Value Soars Beyond 3 Trillion Won"

[Asia Economy Reporter Lee Seon-ae] SM Line, a deep-sea container shipping company under the Samra Maidas (SM) Group, has officially begun preparations for its initial public offering (IPO). Aiming for a listing on the KOSDAQ market in the second half of the year, SM Line is accelerating efforts to determine the expected offering price amid improving shipping industry conditions. Both the shipping and investment banking sectors anticipate that SM Line’s corporate value will easily exceed 3 trillion won at the time of listing, considering the recent rise in stock prices within the shipping industry.

According to the KOSDAQ Market Headquarters of the Korea Exchange on the 13th, SM Line submitted its preliminary listing examination application on the afternoon of the 12th. The lead underwriter is NH Investment & Securities. The number of shares to be listed (planned) is 79,633,458, and the number of shares to be offered (planned) is 23,890,036.

SM Line is expected to review procedures with NH Investment & Securities to follow the fast-track process for the preliminary listing examination. According to Article 22 of the Exchange’s listing regulations, the listing-related review must be completed within 45 trading days from the receipt of the preliminary examination application. However, a fast-track system is in place that shortens the preliminary examination period from 45 business days to 30 business days for high-quality companies. The market expects the listing to proceed smoothly. A Korea Exchange official stated, "The fast-track process takes 30 business days," adding, "The schedule and results of the review will concretize the future timeline."

SM Line was established in April 1991 as a cargo transportation specialist. It operates bases overseas in China, Hong Kong, Singapore, India, and other locations, engaging in shipping and terminal operations. The largest shareholder is Samra Maidas, holding 41.4% of the shares. Samra Maidas is a management consulting company wholly owned by Woo Oh-hyun, chairman of the Samra Maidas Group, serving as a holding company for the group. Other group affiliates such as TK Chemical and Samra also hold around 30% stakes each.

SM Line’s sales increased from 416.2 billion won in 2017 to 1.0328 trillion won in 2020. During the same period, operating profit rose from 35.3 billion won to 140.5 billion won, and net profit also increased from 26 billion won to 107.6 billion won. Both operating profit and net profit turned positive for the first time since 2018.

This year, the improvement in performance has accelerated further. According to SM Line’s own data, the shipping segment’s standalone operating profit for the first quarter was 133.2 billion won, nearly matching last year’s total operating profit. With the Shanghai Containerized Freight Index (SCFI) soaring to unprecedented heights recently, strong performance is expected to continue for the time being. SM Line plans to use the funds raised through the IPO to purchase vessels and containers, expand global bases, and increase manpower.

Meanwhile, the corporate value is expected to exceed 3 trillion won. The offering price during the IPO is determined based on the corporate value, which is derived from the stock prices of listed companies in the same industry. Major shipping companies such as HMM, Pan Ocean, and Korea Line have seen their stock prices rise rapidly thanks to increased ocean freight rates.

SM Line and these three companies share a focus on the container shipping business. The Shanghai Containerized Freight Index (SCFI), which reflects container shipping rates, has broken its all-time high for eight consecutive weeks. A simple estimation of SM Line’s corporate value based on the price-to-earnings ratios (PER) of these three companies suggests that a valuation exceeding 3 trillion won is possible.

In preparation for the listing, SM Line is also working to enhance its corporate value. In May, it announced a new growth strategy that includes route expansion, new vessel orders, digital logistics system development, and strengthening ESG management, and is actively pursuing these initiatives. Recently, it has been pushing forward with the acquisition of a 4,200 TEU-class Panamax container ship from the UK shipowner Borealis Maritime.