SK Biopharm·Big Hit Entertainment... Active IPOs in the Second Half of the Year

[Asia Economy Reporter Koh Hyung-kwang] The initial public offering (IPO) market, which had been sluggish due to the impact of the novel coronavirus disease (COVID-19), is expected to regain momentum from the second half of the year. With major companies such as SK Biopharm and Big Hit Entertainment entering the IPO preparation process, there are forecasts that the market will perform better than in previous years.

According to the financial investment industry on the 7th, from early last month until the 4th of this month, 20 companies have submitted preliminary review applications for listing on the KOSPI and KOSDAQ markets. Even excluding SPAC mergers/listings and transfers of listings, there are 12 cases. This marks a significant change in atmosphere compared to last March, when the stock market plunged due to the COVID-19 crisis and only 7 companies (3 excluding SPACs and transfers) submitted applications.

First, attention is focused on Big Hit Entertainment, the agency of Bangtan Sonyeondan (BTS), which applied for preliminary review at the end of last month. Established in February 2005, Big Hit's main business is music production and management. CEO Bang Si-hyuk holds 45.1% of the shares, making him the largest shareholder. The market values Big Hit’s corporate value at a minimum of 3 trillion KRW and up to 5 trillion KRW. Last year, it recorded consolidated sales of 587.2 billion KRW and operating profit of 98.7 billion KRW.

The Korea Exchange conducts the review within 45 business days after receiving the preliminary review application. The company must submit the listing application and proceed with the public offering process within six months from the date it receives the preliminary review results. Considering this, Big Hit is expected to enter the KOSPI as early as October or by the end of the year at the latest.

Another company expected to revitalize the IPO market is the bio company SK Biopharm. SK Biopharm submitted a securities registration statement to the Financial Services Commission on the 19th of last month for listing on the KOSPI market. Demand forecasting targeting domestic and foreign institutional investors will be conducted over two days on the 17th and 18th, followed by subscription on the 23rd and 24th, with plans to complete the new listing application within this month. Actual stock trading is expected to begin around early July.

SK Biopharm is the first domestic pharmaceutical company to develop an innovative new drug and go public at the commercialization stage. Researcher Yang Ji-hwan of Daishin Securities estimated, "The market capitalization calculated based on the desired public offering price per share ranges from 2.3 trillion KRW to 3.18 trillion KRW, but the maximum market capitalization on the first day of trading could rise to 8.28 trillion KRW, and the appropriate market capitalization after listing is estimated to average 5.85 trillion KRW."

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