Kyochon Sets New KOSPI Record... IPO Fever Continues Strongly

General Subscription Competition Rate Records 1318 to 1... Surpassing Big Hit's Record

Kyochon F&B company building exterior (Photo by Kyochon F&B)

[Asia Economy Reporter Kum Boryeong] As Kyochon F&B set a record surpassing Big Hit Entertainment in the general subscription competition rate, market attention is focused on whether the IPO fever will continue.

According to the financial investment industry on the 6th, Kyochon F&B's general subscription competition rate recorded 1,318.30 to 1 during the subscription period from the 3rd to the 4th, setting a new KOSPI record. Kyochon F&B, the number one chicken franchise company, was considered one of the major IPOs in the second half of the year.

Kyochon F&B's general subscription competition rate exceeds that of Big Hit. Big Hit's general subscription competition rate was 606.97 to 1. However, the subscription deposit for Kyochon F&B was 9.4047 trillion KRW, which is significantly lower than Big Hit's 58.4237 trillion KRW. This is because the F&B public offering price was 12,300 KRW, much lower than Big Hit's 135,000 KRW.

Kyochon F&B also gained popularity in demand forecasting targeting institutional investors. The public offering price was set at the top end of the desired band (10,600 to 12,300 KRW), and the competition rate was 999.4 to 1. Among the 1,109 institutions participating in the demand forecast, 1,010 institutions, accounting for 91%, offered prices at or above the top end.

Park Jongseon, a researcher at Eugene Investment & Securities, analyzed, "Kyochon F&B is expected to sustain stable growth based on its domestic market dominance. Through systematic franchise management, it has the highest average annual sales per franchise and the lowest franchise closure rate compared to competitors. Its full-scale entry into the home meal replacement (HMR) market is also positive."

One point to note is that the mandatory lock-up agreement ratio is relatively low. Among the 3,478,035,000 shares allocated to institutions participating in Kyochon F&B's demand forecast, only 136,254,000 shares, or 3.9%, applied for mandatory lock-up. SK Biopharm had 81.15%, Kakao Games 58.59%, and Big Hit 43.85%. These companies saw their stock prices plunge after the lock-up period was lifted. A financial investment industry official explained, "This is not a problem unique to Kyochon F&B. Since there are many public offering subscriptions at the end of the year, such cases can occur to circulate funds."

The enthusiasm for the IPO market is expected to continue for the time being. According to SK Securities, more than 15 companies that have received review approval will begin full-scale public offering procedures in November. Companies such as Hanatech, Jeil Electric Industry, NFC, and ABKO will conduct demand forecasts this month. SK Securities researcher Lee Sojung said, "With many companies conducting demand forecasts in November, interest in the IPO market will continue," adding, "The scale of public offerings next year will be larger than in 2017, when the IPO market was the hottest in the past five years."

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