IPO Bearing a 'Heavy Burden' Amid COVID-19 Resurgence

Quick Shift to Online Roundtable
Concerns Arise Over Possible Freeze in IPO Market Again

[Asia Economy Reporter Kum Boryeong] The initial public offering (IPO) market, which had been maintaining momentum in the second half of the year, is showing signs of unease due to the resurgence of the novel coronavirus infection (COVID-19). Some companies planning to go public have responded swiftly by canceling pre-briefings or switching to online formats, but they remain on high alert about how the COVID-19 resurgence will impact the market in the near future.

According to the financial investment industry on the 20th, the IPO briefing session for Vaxcell Bio, originally scheduled for the 2nd of next month, has been changed to an online briefing using Zoom Cloud Meeting on the 3rd.

Like Vaxcell Bio, companies preparing for listing are seeing their briefing sessions postponed, canceled, or replaced with online meetings one after another. This is because the government has implemented Level 2 social distancing measures in the metropolitan area, prohibiting indoor gatherings of more than 50 people. The PeopleBio IPO briefing, originally set for the 31st, was postponed by a day and converted to an online meeting on the 1st of next month, and Quantamatrix, scheduled for the 27th, also switched to an online briefing. Ivy Kim Young canceled its IPO briefing held on the 18th on the same day. Kakao Games, considered a major player in the second half, also chose an online briefing due to COVID-19. Especially for IPO briefings targeting institutional investors, where 30 to 50 people at minimum and up to 200 to 300 people gather, holding offline meetings is difficult, so most are planned to be conducted online.

Companies with IPO briefing schedules set for next week or later face even greater concerns. If COVID-19 spreads further over the weekend, they may have to switch briefings to online or change the schedule altogether. A representative from an IR firm responsible for next week's IPO briefings said, "We have not changed the schedule yet, but since we do not know how the situation will develop after the weekend, we are keeping the possibility of schedule changes or switching to online open," adding, "We have been continuously discussing this with companies for several days."

There are also concerns that the IPO market might freeze again, recalling the first half of the year when listing schedules were delayed or withdrawn due to the COVID-19 outbreak. Sencore Tech, which conducted demand forecasting in April, ultimately withdrew its public offering, judging that it was difficult to accurately evaluate corporate value amid the volatile situation caused by COVID-19.

Since then, SK Biopharm, which was listed on the KOSPI market on the 2nd of last month, raised about 31 trillion won in subscription deposits, opening the door to IPO market success, and the subsequent IPO performances exceeded expectations. Looking only at the general subscription competition rates, Iruda, listed on the 6th, recorded a historic high of 3039.56 to 1. Younglimwon Soft Lab, listed on the 12th, had a competition rate of 2493.57 to 1, and Korea Pharma, listed on the 10th, showed a subscription competition rate of 2035.74 to 1. In addition, TSI and Apro, listed last month, attracted attention by exceeding 1500 to 1. Many companies also surpassed 500 to 1. While there are differences between companies, considering that NPD's general subscription competition rate in March was 32.65 to 1, the temperature difference in the IPO market is quite significant.

The fortunate point is that unlike the first half of the year, the stock market has not crashed and is holding steady. Another IR firm representative said, "In the first half, the market situation was so bad that many companies gave up listing or postponed their schedules, making it difficult, but now that they have experienced it once, it seems they have learned," adding, "However, if stock prices fall sharply, investor sentiment could also decline, so companies planning to list should pay close attention to that aspect."

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