This Year's Rookie Stocks Average 65% Increase from IPO Price... "Myeongshin Industry 515% Profit"

[Asia Economy Reporter Minji Lee] Rookie stocks that entered the stock market this year have posted high returns amid the public offering investment craze.

According to the Korea Exchange on the 20th, the average stock price increase rate compared to the public offering price of 71 companies listed on the KOSPI and KOSDAQ markets this year (excluding SPAC and merger listings) was 65.2% as of the 18th.

Individual investors are receiving subscription consultations at the Korea Investment & Securities headquarters sales department in Yeongdeungpo-gu, Seoul, on the 6th, the last day of the general public subscription for Big Hit Entertainment, the agency of the group BTS. After the general public subscription ends on this day, Big Hit is scheduled to be listed on the KOSPI market on the 15th. Photo by Moon Honam munonam@

The company with the highest increase rate was Myungshin Industry, which recorded a return of 515.4%. If you participated in Myungshin Industry's public offering process and still hold the shares, you would have earned about five times the return compared to the public offering price. Myungshin Industry, which was listed on the KOSPI on the 7th, had a public offering price of 6,500 KRW. Other companies with high returns included Vaxcell Bio (496.3%), Point Mobile (311.3%), SK Biopharm (270.4%), and Inbio (218.1%).

By market, KOSPI-listed companies (10 companies) achieved an average return of 85.0%, while KOSDAQ companies (61 companies) recorded an average return of 61.9%. The high interest in the initial public offering (IPO) market is interpreted as having driven up the stock prices of public offerings.

The larger the subscription deposit, the relatively higher the stock price rose. Among 11 companies with subscription deposits exceeding 5 trillion KRW, the average increase compared to the public offering price was 126.3%, while the stock prices of 28 companies with deposits below 1 trillion KRW rose by an average of 46.4%.

The so-called 'Ttassang-sang'?where the opening price is formed at twice the public offering price and then closes at the upper limit for two consecutive days after listing?occurred in a total of four companies (Solux, Kakao Games, SK Biopharm, and LIT). Since the price limit was expanded to 30% in 2015, only three KOSPI and KOSDAQ stocks had recorded 'Ttassang-sang' before this year. Notably, SK Biopharm became the first company in the KOSPI market to close at the upper limit for three consecutive days after listing.

With the domestic stock market rising since last month, companies listed in November saw an average increase of 66.6% over the public offering price, and those listed in December rose by an average of 136.3%, showing a significant upward trend in public offerings.

However, some companies recorded 'negative' returns. It appears that stock price volatility increased due to changes in supply and demand, such as the release of lock-up shares. Kakao Games, which attracted the largest subscription deposits in history, saw its stock price plunge 7% in one day after institutional lock-up shares were released in October. Big Hit also saw its stock price fall to the public offering price level due to the release of lock-up shares and other factors. Kakao Games' return, which once reached 238% compared to the public offering price at the beginning of listing, has now dropped to 93.1%. Big Hit recorded a 20.0% increase.

Researcher Jongseon Park explained, "In the early stages of listing, stock prices move based on supply and demand, so the volatility can be quite large. When lock-up shares are released, the fluctuations are even more sensitive, so it is important to carefully observe the timing of the release."

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