[Featured Stock] Hyundai Heavy Industries Surges Over 6% on Stock Market Debut Day... Parent Company Korea Shipbuilding & Offshore Engineering Drops 7.6%

[Asia Economy Reporter Park Jihwan] Hyundai Heavy Industries is soaring over 6% on its first day of trading on the KOSPI on the 17th. Meanwhile, the stock price of Hyundai Heavy Industries' parent company, Korea Shipbuilding & Offshore Engineering, is sharply falling over 7% during the session.

According to the Korea Exchange on the day, as of 10:15 a.m., Hyundai Heavy Industries' stock price is trading at 118,000 KRW, up 6.31% from the opening price. The opening price was set at 111,000 KRW, which is 85% higher than the public offering price of 60,000 KRW.

On the other hand, at the same time, the parent company Korea Shipbuilding & Offshore Engineering's stock price is trading at 109,500 KRW, down 7.59% from the previous day. This is interpreted as the effect of the 'holding company discount,' where the value of the parent company's shares is diluted when a subsidiary is listed. The holding company discount refers to the phenomenon where the parent company's value decreases because the values of the two companies are double-counted due to the subsidiary's listing.

Researcher Lee Dongheon of Daishin Securities explained about Korea Shipbuilding & Offshore Engineering, "Among the subsidiaries, Hyundai Mipo Dockyard is already listed, and following Hyundai Heavy Industries this year, Hyundai Samho Heavy Industries is scheduled to be listed next year," adding, "The reflected value of unlisted subsidiaries may decrease."