[Practical Finance] Will Fosbank, HB Invest, and Others Fuel the IPO Boom?

Promising IPO Stocks Gaining Attention in the 'Year of the Blue Dragon'
IPO Subscription Frenzy Following Last Year's Emergence of 'Ddadable' New Stocks
APR Surpassing '1 Trillion Won' Valuation, Listing on KOSPI

Since the financial authorities expanded the price fluctuation range on the first day of listing, market funds have been pouring into the initial public offering (IPO) market. The enthusiasm for public offering subscriptions is expected to remain hot this year following the second half of last year. Since the expansion of the fluctuation range on the listing day on June 26 last year, three companies?KNS, LS Materials, and DS Danseok?recorded 'ddadabble (4 times the public offering price)' on their listing day, indicating fierce competition for public offerings for the time being.

According to the financial investment industry on the 3rd, POSBank will conduct demand forecasting for institutional investors from the 5th to the 11th. The expected public offering price range is 13,000 to 15,000 KRW, with an estimated market capitalization of 121.6 billion to 140.3 billion KRW.

POSBank is a supplier of point-of-sale (POS) and kiosk systems. It sells to domestic and international large marts, convenience stores, as well as restaurants and cafes. It has established a network with over 200 clients in 80 countries worldwide, including the United States and Europe, expanding into overseas markets. POSBank recorded sales of 63.5 billion KRW and operating profit of 8.3 billion KRW up to the third quarter of last year.

The global POS market size is expected to grow at an average annual rate of 15.9%, from approximately 22.1 billion USD (28.7 trillion KRW) in 2021 to 70.7 billion USD (91.8 trillion KRW) in 2029. The shipment volume of POS terminals is expected to increase from 140 million units in 2020 to 270 million units in 2025.

Following POSBank, venture capital (VC) HB Investment and shipbuilding equipment company Hyundai Hims will conduct demand forecasting from the 8th to the 12th.

HB Investment's expected public offering price range is 2,400 to 2,800 KRW, with a maximum public offering size of approximately 18.7 billion KRW. Established in 1999, HB Investment is a first-generation venture capital firm. It diversifies investments in high-tech, software, and bio (healthcare) sectors. Last year, it recovered 97.3 billion KRW in investments through HPSP, Vuno, Bioplus, and others. It achieved operating revenue of 17.7 billion KRW and operating profit of 10.9 billion KRW up to the third quarter of last year.

Hyundai Hims, established in June 2008 through a capital contribution in kind from Hyundai Heavy Industries, focuses on ship blocks, ship interiors, and outfitting painting in the shipbuilding equipment business. The expected public offering price range is 5,000 to 6,300 KRW, with a total public offering size of 43.5 billion to 54.8 billion KRW. It recorded sales of 134.3 billion KRW and operating profit of 11 billion KRW up to the third quarter of last year. Major clients include HD Hyundai Heavy Industries and Hyundai Samho Heavy Industries. It holds the largest domestic production capacity among external ship block manufacturers.

There are also a considerable number of prospective listed companies aiming to list on the Korea Exchange. APR, estimated to have a corporate value exceeding 1 trillion KRW, will conduct demand forecasting for institutional investors from the 22nd to the 26th and finalize the public offering price. The expected public offering price range is 147,000 to 200,000 KRW, with an estimated market capitalization of 1.1149 trillion to 1.5169 trillion KRW. It aims to list next month.

Founded in 2014, APR operates beauty brands such as 'MediCube,' 'AprilSkin,' 'Forment,' and 'GlamD Bio,' as well as the fashion brand 'Nerdy.' The beauty device brand MediCube AGE-R, launched in 2021, surpassed cumulative sales of 1.5 million units in November last year. It recorded sales of 371.8 billion KRW and operating profit of 69.2 billion KRW in the third quarter of last year, increasing by 37.9% and 277.6% respectively compared to the same period the previous year.

HD Hyundai Marine Solutions, estimated to have a corporate value exceeding 3 trillion KRW, aims to list in the first half of this year. It submitted a preliminary listing examination application to the Korea Exchange's securities market headquarters last month. Established in November 2016 through a capital contribution in kind by acquiring the after-sales (AS) business of Hyundai Heavy Industries' shipbuilding, engine, and electrical and electronic divisions, it is a construction technology specialist engaged in ship parts sales and eco-friendly ship retrofit businesses. Recently, the 'Methanol Dual-Fuel Propulsion Retrofit Design,' jointly developed with Korean Register (KR), HD Hyundai Shipbuilding & Offshore Engineering, and HD Hyundai ENT, received basic certification (AIP) from KR.

The investment banking (IB) industry estimates HD Hyundai Marine Solutions' corporate value to be in the 3 trillion KRW range. It recorded sales of 1.3338 trillion KRW and operating profit of 142 billion KRW in 2022. HD Hyundai holds a 62% stake as the largest shareholder. Global private equity fund (PEF) Kohlberg Kravis Roberts (KKR) holds a 38% stake in HD Hyundai through the special purpose company (SPC) Global Vessel Solutions established in 2021.

Although there has been a lack of large-scale public offerings since the second half of 2022, the possibility of their reappearance this year is high. If APR and HD Hyundai Marine Solutions successfully list, large-scale public offerings exceeding 1 trillion KRW are expected to prepare for listing. An IB industry official explained, "Although market funds poured into the IPO market last year, the absence of a true 'large-scale' offering was a regrettable aspect." He added, "Whether SK Ecoplant and LG CNS will proceed with listing procedures will be a point to watch this year."