Stocks Without Year-End Cold in Public Offering

Myeongshin Industry Public Offering Subscription Competition Rate 1373 to 1
"Consider Circulating Shares When Investing in IPO Stocks"

[Asia Economy Reporter Minji Lee] As liquidity has increased significantly, the stock market has shown a strong upward trend, bringing a favorable wind to the year-end public offering subscription market. Following the initial public offerings (IPOs) of large companies such as SK Biopharm and Kakao Games, the listings of small and medium-sized stocks continue, and investor interest in public offering stocks remains strong.

On the 1st, Myungshin Industry, an automobile body parts manufacturer planning to list on the KOSPI market, recorded a competition rate of 1,373 to 1 in the general public subscription held over two days until the previous day. Highlighted by its supply of parts to Tesla, it gathered 14 trillion KRW in subscription deposits alone. Myungshin Industry, which showed a competition rate of 1,195.69 to 1 in the demand forecast and set the public offering price (6,500 KRW) above the desired price band (4,900 KRW to 5,800 KRW), also attracted strong interest in the public offering targeting general investors.

Yeouido Stock Market Scene

Recently, in the public offering market, it is common for demand forecasts targeting institutions to exceed a competition rate of 1,000 to 1. Since last month, Hana Technology recorded a competition rate of 1,393.98 to 1, Jeil Electric Industry 1,196.21 to 1, Point Mobile 1,447.07 to 1, ABKO 1,141.02 to 1, Ngen Bio 1,006.96 to 1, and InBio 1,386.04 to 1, showing high competition rates.

Typically, the year-end is a challenging environment for public offerings to succeed due to tightly packed listing schedules and institutions’ book closings. However, this year, the number of companies going public is smaller compared to the past 2-3 years, and with abundant market liquidity, investor interest in the public offering market has increased. In the past two years, 23 and 22 companies respectively went public in November, but this year only 8 companies have done so. Although the number of companies going public has decreased, individual investors’ interest in public offerings has rather concentrated.

It is estimated that a total of 19 public offering subscription schedules (including SPAC listings) are set until the end of the year. Up to 6 to 8 companies per week plan to raise funds by the 18th, mostly small and medium-sized stocks related to IoT and medical devices.

With the expansion of public offering allocation opportunities for general subscribers starting this month, it is expected that individuals will be able to participate more in the IPO market. However, since large investors often flood the market with massive sell-offs after listing, causing individuals to be trapped at high prices, careful selection is essential. Hana Technology, which was listed on the 25th, recorded a 'ttasang' (opening price at twice the public offering price followed by the upper limit price on the first trading day) but has since fallen about 17%.

Considering that public offering stocks tend to move based on liquidity supply and demand for three months after listing, choosing stocks with less supply-demand pressure can be an investment strategy. Researcher Jongseon Park of Eugene Investment & Securities explained, "A low float means institutions consider the stock good and are not selling it, and because the float is low, the probability of the stock price rising is higher. Looking at recent trends, stocks with a high initial price tend to show greater volatility, while those with a low initial price tend to steadily increase."

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