Detailed Data Verification
Increase in Technology Special Listing
But Performance Lags Behind Reputation
Examining Industry Trends and Risk Factors
Demanding Rational Basis for Future Profit Estimates
[Asia Economy Reporter Lee Jung-yoon] As the number of companies going public through special listing exemptions due to technological growth continues to increase day by day, the Financial Supervisory Service (FSS) plans to strengthen its review of initial public offerings (IPOs) by new industry businesses such as the metaverse (extended virtual world) and non-fungible tokens (NFTs). This is because, unlike traditional industries, new industry sectors have relatively less historical data and less verification.
According to the FSS on the 8th, last year, 36 companies were specially listed on the KOSDAQ IPO due to technological growth, including mobile point platform NBT and new drug development company Neoimmunetec, accounting for 48% of all newly listed companies. This number has steadily increased from 21 companies (30%) in 2018 to 23 companies (34.8%) in 2019 and 26 companies (40%) in 2020.
In particular, among companies specially listed due to technological growth, the number of IT companies dealing with metaverse or NFTs is also increasing. It rose from 2 companies in 2018 and 2019 to 3 companies in 2020, and surged to 11 companies in 2021. Last year, AI medical company Vuno was specially listed with a public offering amount of 37.8 billion KRW, and fan platform company DearU raised 85.8 billion KRW through a public offering.
However, the performance of these listed companies has not been good. Vuno's stock price rose to 20,950 KRW on December 16 last year but has been declining and was trading at 12,350 KRW as of 9:05 AM on the day. DearU, which was listed on November 10 last year, recorded 99,100 KRW on the 16th of the same month but has since fallen and was at 53,700 KRW as of 9:10 AM on the day. Other IT companies that were specially listed include AI video analysis company C-Lab based on large-scale data and vehicle software platform technology developer Obigo.
The FSS predicts that IPOs of companies in new technology industries such as the metaverse will continue to increase. Accordingly, they plan to closely review and enhance disclosure completeness to ensure that industry trends, risk factors, business models, and plans are systematically described in the securities registration statements of specially listed companies.
This is because, unlike traditional industries, new technology and IT sectors have relatively fewer cases of securities registration statement entries, and industry trends are less objectively verified. While not adding specific items, the FSS intends to review whether the statements are written in detail from the perspective of general investors.
Additionally, the FSS will focus on reviewing the appropriateness of the basis for estimating future profits when determining the public offering price for IT company IPOs. Many new technology-related specially listed companies often lack existing sales or operating performance, so when estimating future profits to calculate the offering price, formulas or assumptions are sometimes difficult to understand or insufficient.
Typically, specially listed companies estimate future profits and discount the estimated value to present value when calculating the public offering price.
An FSS official explained, "However, since characteristics vary by industry and company, it is difficult to present standards for the basis of future profit estimates in advance," adding, "Because future prices are calculated, assumptions and estimates are involved, and we intend to require more reasonable grounds for these."
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