Stock Market Shines, But Newly Listed Shares Remain Cloudy

Only 7 Out of 14 Newly Listed Stocks Surpass First-Day Closing Price
Cosmetics, New Drug, and Robotics Stocks Soar on Theme-Driven Rally
"Valuation Appropriateness Is Crucial"

Although the domestic stock market has shown strong momentum, with an increase of over 10% in just over a month, newly listed stocks have struggled to join this upward trend. This is interpreted as the result of selective screening among new stocks, as well as the strong performance of major theme sectors, which has led to the marginalization of these newcomers.

According to the Korea Exchange on June 24, a total of 14 companies have been listed on the KOSPI and KOSDAQ (excluding SPACs) from April this year through this date. Of these, 11 companies have exceeded their initial public offering (IPO) prices. This means that 78.57% of all newly listed companies have recorded solid returns.

However, when comparing to the closing price on the first day of listing?which saw the largest fluctuation of 300%?only 7 stocks have managed to surpass their first-day closing price. This is in stark contrast to the sharp upward trend seen in the KOSPI, which rose from the 2,480 level to the 3,000 level, and the KOSDAQ, which climbed from the 680 level to the 780 level, from April through June.

Securities industry analysts attribute this price differentiation to the prevalence of theme-driven trading and selective stock screening. A financial investment industry official explained, "When the index is strong, the market tends to focus on specific themes. Stocks that fall outside these themes are usually left behind."

The cosmetics sector has been one of the standout performers in this rally. Recently, cosmetics stocks have continued to strengthen, driven by improved Korea-China relations and increased sales volumes. According to Samsung Securities, from June 1 to June 20, cosmetics exports reached $228 million, up 23.2% from the same period last year. Compared to the previous month, exports also increased by 19.8%. Dalba Global, a cosmetics company listed on May 22, had an IPO price of 66,300 won and a first-day closing price of 110,100 won. As of the previous day, its closing price was 183,200 won. The company operates the vegan beauty brand 'Dalba,' which uses white truffle produced in Italy as its key ingredient.

In addition, newly listed stocks related to robotics and new drug development have also shown strong gains. Now Robotics, an industrial robot specialist listed on May 8, had an IPO price of 6,800 won, a first-day closing price of 15,400 won, and a June 23 closing price of 22,000 won. Intocell, a company specializing in antibody-drug conjugate (ADC) drug research that was listed on May 23, recorded an IPO price of 17,000 won, a first-day closing price of 33,200 won, and a previous day closing price of 39,050 won, demonstrating a solid share price trend.

Furthermore, analysts note that the perspective on newly listed stocks has changed. The importance of valuation has increased, moving away from the previous trend of selling at the opening price. Cho Daehyung, a researcher at DS Investment & Securities, emphasized, "The extent of price decline after listing is also determined by how reasonable the market capitalization is at the time of listing. In order to minimize post-listing declines and encourage mid- to long-term investment in newly listed stocks, it is essential for IPOs to be priced at a valuation acceptable to the market."