[Asia Economy Reporter Lee Seon-ae] This year’s initial public offering (IPO) market set an all-time high record. It broke records for the highest subscription competition rate, subscription deposit, and public offering amount. The dazzling enthusiasm is expected to continue into next year. Although there is an outflow of individual investors due to liquidity tightening, a series of so-called 'mega fish' companies valued at over 10 trillion won are lined up. There are even rosy forecasts that the public offering amount will exceed 30 trillion won, surpassing this year’s record high of 20 trillion won.
According to the Korea Exchange on the 27th, 121 companies (including SPACs and REITs) were newly or previously listed this year. The cumulative public offering amount reached 20.7493 trillion won, setting an all-time high record. Compared to last year’s 5.6951 trillion won, this is more than three times higher. It is also more than double the previous record of 10.1453 trillion won set in 2010.
The subscription deposit and subscription competition rate also boasted record-high levels. SK Bioscience, which raised a subscription deposit of 63.6198 trillion won, set the highest record but was pushed to second place two months later by SK IE Technology. SK IE Technology’s record is 80.9017 trillion won. In addition, Kakao Bank (2.6 trillion won), Krafton (4.3 trillion won), and Kakao Pay (1.5 trillion won) attracted subscription deposits worth trillions of won to the stock market.
Regarding subscription competition rates, the first IPO winner of this year, NBT, opened the market with a record-high competition rate of 4,397.7 to 1. Maxst, which was listed in July, set an astonishing record of 6,762.8 to 1.
The returns were not bad either. Although there were many cases of poor returns as the market sorted out winners and losers in the second half of the year, the average return on public offering stocks this year exceeded 30% as of last week. Among the mega fish with a public offering amount exceeding 1 trillion won this year, SK Bioscience had the highest return at 321.5%. It was followed by Kakao Pay (91.7%), Kakao Bank (59.7%), and SK IE Technology (57.6%). Krafton, the largest public offering stock, showed a negative return of -5.4%.
The IPO market is expected to continue its boom next year as well. The financial investment industry forecasts that the IPO public offering amount will exceed 30 trillion won next year. The first IPO of the Year of the Black Tiger is LG Energy Solution, which is expected to set the largest IPO record since the founding of Dangun. The public offering size is estimated between 10.9225 trillion and 12.75 trillion won. This is more than double the previous record set by Samsung Life Insurance in 2010 (4.8881 trillion won). LG Energy Solution will finalize its public offering price through institutional demand forecasting on January 11 and 12 next year. If the public offering price is set at the upper end of the desired range (257,000 to 300,000 won), the market capitalization will instantly reach 70.2 trillion won. There are even forecasts that if the stock price soars, it could surpass SK Hynix (88 trillion won), which is currently the second-largest by market capitalization.
There are many other mega fish companies as well. The next most notable company after LG Energy Solution is Hyundai Engineering, a construction company affiliated with Hyundai Motor Group, with an estimated corporate value of 10 trillion won. It is preparing for listing in February next year, and it is expected to surpass its parent company Hyundai Construction (about 5 trillion won) to become the leading construction stock. Hyundai Oilbank, an oil company affiliated with Hyundai Heavy Industries Group, also submitted a preliminary review application to the Korea Exchange this month and is expected to enter the KOSPI as early as May next year.
Kakao Entertainment, a Kakao subsidiary that handles various content such as webtoons and web novels, is preparing for listing in the first half of next year. Kakao Entertainment’s corporate value is also estimated to be around 10 trillion won. The IPO speed race of the 'dawn delivery three companies'?SSG.com, Kurly, and Oasis Market?is also worth watching. SK Square, which was spun off from SK Telecom, is preparing for the listing of its first subsidiary One Store, and Kyobo Life Insurance, one of the big three in the insurance industry, is also preparing for listing.
Researcher Na-ye Lee of Korea Investment & Securities explained, "There are 13 mega fish companies with an estimated corporate value of over 1 trillion won expected to be newly listed next year, which is more than the 11 companies listed this year," adding, "A bumper year for new listings is expected next year as well."
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