"Trillions Lined Up"... New Year IPO Market Aims for Record Highs

[Asia Economy Reporter Koh Hyung-kwang] KakaoBank, SK Biopharm, Hyundai Card. These solid companies, whose names alone convey a sense of weightiness, are entering the initial public offering (IPO) market this year.

Along with companies that postponed their listings due to last year's stock market slump, and large-scale companies valued in the trillions of won, a lineup is waiting, making this year's IPO market expected to be hotter than ever. There are even expectations that the public offering scale will surpass the record high of 8 trillion won in 2017.

According to the Korea Exchange on the 5th, 75 companies were listed on the KOSPI and KOSDAQ markets last year, with a public offering scale of about 3.81 trillion won. Although this is somewhat higher than the 2.82 trillion won in 2018, it is only about half of the 7.81 trillion won recorded in 2017.

This year, as IPO hopefuls are expected to list one after another, the public offering market is set to be a "big event." The most eye-catching is SK Biopharm. Established in April 2011, it is a central nervous system-related new drug development company wholly owned by SK. In November last year, it succeeded in obtaining U.S. Food and Drug Administration (FDA) approval for the epilepsy treatment drug "Xcopri" (generic name cenobamate). Notably, this is the first time a domestic pharmaceutical company has directly applied for FDA sales approval without licensing out the drug technology, drawing significant attention. The company is valued at over 5 trillion won. Having applied for preliminary listing review at the exchange in October last year, it is expected to list in the first half of this year.

KakaoBank, which announced its listing plan last year, has also begun preparations for listing. Following approval from financial authorities in November last year, the major shareholder changed from Korea Investment Financial Holdings to Kakao, accelerating the listing process. KakaoBank, which recorded its first profit last year, is the leader in the internet banking industry, with an estimated corporate value around 6 trillion won. Its listing is significant in terms of capital acquisition and is also interpreted as a commitment to accelerate growth through aggressive business expansion.

Taekwang Industrial, a specialized footwear original equipment manufacturer (OEM), is also preparing for an IPO. In August last year, Taekwang Industrial selected Korea Investment & Securities as the lead underwriter and is aiming to enter the KOSPI market in the first half of this year. Taekwang Industrial’s corporate value is estimated to be around 4 to 5 trillion won. Hyundai Card is also reportedly coordinating to select a lead underwriter with the goal of listing on the KOSPI market. Industry insiders estimate Hyundai Card’s corporate value at about 2.5 trillion won, considering price-to-book ratios and other factors.

CJ Healthcare, acquired by Kolmar Korea, is also preparing for listing. CJ Healthcare has selected Samsung Securities, Korea Investment & Securities, and JP Morgan as lead underwriters to prepare for the listing. CJ Healthcare’s corporate value is reported to be around 1.5 to 2 trillion won.

The listing of Hotel Lotte, which operates hotel and duty-free businesses, is also a hot topic. It attempted to list in 2016 but withdrew due to allegations of preferential treatment in duty-free shops. At that time, the industry valued Hotel Lotte at 15 trillion won. Recent group personnel and organizational restructuring have been analyzed as groundwork for pushing forward Hotel Lotte’s listing, leading to speculation that listing procedures may begin soon.

Labor Gil, a researcher at NH Investment & Securities, said, "Last year, companies planning trillion-won scale public offerings postponed their listings to this year, resulting in a somewhat subdued new listing public offering market last year. With companies expected to have trillion-won scale public offerings preparing for IPOs this year, a fresh breeze is expected to blow through the IPO market after a long time."

This content was produced with the assistance of AI translation services.