[After CB Issuance] Mikobio's CB Investors Hit the Jackpot... Public Offering Investors Feel Down

[Asia Economy Reporter Yoo Hyun-seok] The fortunes of investors in newly listed company Micobiomed are diverging. Convertible bond (CB) investors have hit the jackpot, while those who invested in the public offering are suffering losses due to sluggish stock prices.

According to the Financial Supervisory Service's electronic disclosure system (DART) on the 3rd, Micobiomed issued its 4th series CB worth 5 billion KRW privately in May 2018 to raise operating funds. The terms at issuance included a nominal interest rate of 1%, maturity interest rate of 3%, and a conversion price of 6,510 KRW. The issuance target was Mirae Asset Daewoo (trustee of Smilegate Citrus KOSDAQ Venture Specialized Private Investment Trust).

In the following year, 2019, Micobiomed also issued the 5th series CB worth 5 billion KRW to raise operating funds. The terms were better than the 4th series: a nominal interest rate of 0% and a maturity interest rate of 1.5%. The conversion price was 6,570 KRW. The issuance target was Lindeman Asia Investment Association No.10. In December last year, the conversion prices of the 4th and 5th series were adjusted from 6,510 KRW and 6,570 KRW to 6,466 KRW due to a paid-in capital increase.

The CBs have recently been undergoing conversion rights exercises one after another. On the 23rd of last month, it was disclosed that the 4th series would be converted into shares on the 30th, and the 3rd and 5th series CBs would also be converted into shares on the same day. Approximately 75,287 shares of the 3rd series are scheduled to be listed on the 17th of this month. The conversion price is 5,313 KRW. The 4th and 5th series will list 386,637 shares and 154,655 shares respectively on the same day as the 3rd series. The conversion price is 6,466 KRW.

Based on the conversion prices, the total shares to be converted this time amount to 616,579 shares, with a total value of about 3.9 billion KRW. As of the 2nd, Micobiomed's stock price was 12,350 KRW. Calculated at the current stock price level, this amounts to 7.61475 billion KRW. CB investors can thus gain a difference of about twice their principal. After this conversion, the unconverted balance of the 4th series is 500 million KRW, and the 5th series is 4 billion KRW.

The reason for such huge profits is largely due to Micobiomed's high public offering price. The desired public offering price range was 12,000 to 15,000 KRW, and the final public offering price was set at 15,000 KRW, the upper end of the desired range.

Micobiomed was able to secure the upper end of the desired public offering price largely thanks to the COVID-19 theme stock boom. From the early stages of COVID-19, Micobiomed supplied diagnostic kits to about 30 to 40 countries across the Americas and Europe. As a result, sales, which were 4.1 billion KRW last year, reached 21.7 billion KRW in the first half of this year alone.

Micobiomed, which entered the market through a technology special case, calculated its public offering price using a comparative valuation method based on the price-earnings ratio (PER). It was estimated to generate a net profit of 12.2 billion KRW in 2022. A PER of 37.3 times was applied. At that time, companies engaged in similar businesses such as LabGenomics (31.8 times), Boditech Med (42.7 times), and Seegene (31.4 times) all received high PERs, which raised Micobiomed's desired public offering price.

However, Micobiomed's stock price on KOSDAQ has been sluggish. Micobiomed, which was listed on KOSDAQ on the 22nd of last month, closed trading below the public offering price from the first day. On the 2nd, it recorded 12,350 KRW. The stock price has been below the public offering price since listing. Ultimately, those who invested at Micobiomed's public offering price have incurred losses, while CB investors have gained profits.

Founded in 2009, Micobiomed is an in vitro diagnostics company focusing on three areas: molecular diagnostics, biochemical diagnostics, and immunodiagnostics. It possesses point-of-care testing (POCT) technology called 'Lab-on-a-Chip.' This innovative technology extracts, amplifies, and diagnoses genes from pathogens such as bacteria and viruses, ensuring speed, accuracy, and cost-effectiveness. Micobiomed, which was listed on KONEX in 2015, recently transferred its listing to KOSDAQ last month.

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