Innospace Plunges on First Day of Listing... Overvaluation Controversy Inevitable

Including Loss-Making Companies Among Underwriters and Peer Firms... Average PER 42.3x
Innospace Estimated Net Profit of 21.5 Billion KRW in 2026
Risk of Loss from 'Blind' IPO Investment

Space launch startup Innospace fell below its offering price on its first day of listing. As controversy over Innospace's overvaluation of the offering price emerged, there appears to be a movement in the initial public offering (IPO) market to carefully select stocks before subscribing to public offerings.

According to the financial investment industry on the 3rd, Innospace closed at 34,450 KRW, down 20.44% from the offering price of 43,300 KRW the previous day.

Innospace, which was listed on the KOSDAQ market the day before, started trading at an opening price of 43,900 KRW and rose to as high as 46,050 KRW in the early session. Afterwards, as sell orders from institutional investors flooded in, the stock price widened its decline. Fifteen minutes before the market closed, it dropped to 33,750 KRW before slightly recovering the loss.

Innospace is commercializing launch services that transport satellites into orbit using the hybrid rocket technology-based space launch vehicle 'HANBIT'. Hybrid rockets have a simpler structure compared to liquid rockets, making manufacturing costs relatively cheaper. It is the first domestic private company to successfully test-launch the test launch vehicle 'HANBIT-TLV'.

From the 11th of last month, a demand forecast was conducted for institutional investors over five trading days. The offering price was set at the upper end of the desired price range, 43,300 KRW. About 99.6% of the participating institutions hoped to acquire shares at prices above the upper end of the desired range.

A representative from Mirae Asset Securities, which underwrote the listing, said, "We decided the offering price at a market-friendly price," adding, "Most major domestic asset management companies, as well as many global pension funds and overseas high-quality long-term funds, participated in the demand forecast."

On the first day of listing, the 2nd, institutions net sold 1.3 million shares of Innospace. Institutions received 950,000 shares through the demand forecast. It appears that some of the venture finance shares held before listing and the shares allocated to institutions were sold on the first day. The average selling price by institutions was 43,238 KRW, similar to the offering price.

Individuals net bought Innospace shares worth 73.3 billion KRW that day. The average purchase price was 40,467 KRW, resulting in a first-day unrealized loss rate of 14.9%.

The listing of Innospace may trigger controversy over the appropriateness of the IPO market's offering price calculation method. Mirae Asset Securities selected three comparable companies?Korea Aerospace Industries, Genoco, and Orbitech?to estimate Innospace's fair corporate value. Among the three, Orbitech recorded a net loss last year, and Genoco recorded a net loss in the first quarter of this year. Based on last year's performance, Genoco's price-to-earnings ratio (PER) was 75.2 times, and Orbitech's annualized PER based on the first quarter's performance was 36.0 times. The benchmark PER of 42.3 times is about twice Korea Aerospace Industries' last year's PER of 22.9 times.

Innospace's estimated net profit for 2026 is 21.5 billion KRW. Applying an annual discount rate of 13 billion KRW and a benchmark PER of 42.3 times, the calculated fair corporate value reaches 549.8 billion KRW. Last year, Innospace recorded sales of 231 million KRW, an operating loss of 15.9 billion KRW, and a net loss of 83.2 billion KRW.

Researcher Jeong Jisoo of Meritz Securities explained, "We present a fair stock price for Innospace of 34,800 KRW," adding, "We applied an average PER of 20.9 times for peer companies to the expected earnings per share (EPS) of 1,663 KRW in 2026."