Newly Listed Stocks Yield 63% This Year... IPO Investors See Solid Gains

On the morning of the 27th, officials attending the LG Energy Solution's KOSPI new listing ceremony held at the Korea Exchange in Yeouido, Seoul, are celebrating the commencement of trading. From the left: Ahn Sang-hwan, Chairman of the Korea IR Council; Cho Sang-wook, CEO of Morgan Stanley Seoul Branch; Lim Jae-jun, Head of the Korea Exchange's KOSPI Market Division; Son Byung-doo, Chairman of the Korea Exchange; Kwon Young-soo, CEO of LG Energy Solution; Lee Chang-sil, CFO of LG Energy Solution; Kim Sung-hyun, CEO of KB Securities; and Lee Ki-heon, Executive Vice Chairman of the Listed Companies Association. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Minji Lee] Newly listed stocks this year have shown a solid performance, achieving an average return of 63%.

According to the Korea Exchange on the 2nd, the stock prices of five companies newly listed through initial public offerings (IPOs) last month (based on the closing price on the last trading day of January) rose by an average of 62.82% compared to their offering prices. Considering that the KOSPI fell by 10.56% and the KOSDAQ index dropped by 15.58% last month, IPO investors earned high returns.

The largest IPO, LG Energy Solution, entered the market on the 27th of last month with an opening price of 597,000 KRW, about twice the offering price of 300,000 KRW, becoming the second-largest company by market capitalization on the KOSPI. However, due to profit-taking selling, the stock price plunged 15.41% and 10.89% on the first and second days of listing, respectively, closing at 450,000 KRW on the 28th. Although it failed to achieve the so-called ‘ttasang’?opening at twice the offering price and hitting the daily upper limit?the return compared to the offering price still reached 50%.

Small and mid-sized KOSDAQ listed companies also performed well. The top gainer was Auto&Co, an automotive parts development and distribution company spun off from Hyundai Motor Group’s in-house venture. On the 28th of last month, Auto&Co’s stock price reached 16,850 KRW, soaring 217.92% above the offering price of 5,300 KRW. Although it failed to achieve ‘ttasang,’ it closed at the daily upper limit on both the first and second days of listing. Art auction company K-Auction also rose 66.75% compared to its offering price. K-Auction entered the market on the 24th of last month with the year’s first and the first ‘ttasang’ in three months since GI Tech at the end of October last year.

On the other hand, some newly listed companies showed poor performance after listing. DB Financial SPAC No.10 (5.50%) and animal pharmaceutical company Adbiotech (-25.86%) recorded lackluster results.