SKIET, Which Set Various New Records, Fails to Open at Double Price... Drops Over 20%

After IPO price doubles at opening, 'ttasang' fails... Drops to around 24% during trading session

No Jaeseok, CEO of SK Innovation Technology, is attending the 'SK Innovation Technology (SKIET) KOSPI Listing Ceremony' held at the Korea Exchange in Yeouido, Seoul on the 11th, signing to commemorate the listing. Photo by Kang Jinhyung aymsdream@

[Asia Economy Reporter Lee Seon-ae] SK Innovation Energy Technology (SKIET), which set various new records and made new history in the domestic IPO market, debuted on the Korea Composite Stock Price Index (KOSPI) on the 11th but failed to achieve the much-anticipated "ttasang" (a phenomenon where the opening price is formed at twice the IPO price and then soars to the upper limit). Given that it set new records in all aspects including demand forecasting, general subscription competition rate, and subscription deposits, expectations for "ttasang" were high. However, due to a flood of sell orders, it failed and showed a sharp decline of more than 20% compared to the opening price.

On that day, SKIET's opening price was formed at 210,000 KRW, twice the IPO price of 105,000 KRW, and soared to 222,500 KRW immediately after the market opened. However, as sell orders poured in, by 9:26 AM, it plunged by 24.05% to 159,500 KRW. Investors flocked in large numbers following news that this might be the last major IPO before the ban on duplicate subscriptions by securities firms, but the sell-off widened the decline, and the stock could not escape the downward trend.

According to SKIET's securities issuance performance report, the tradable volume on that day was 15% (10,720,948 shares allocated to institutions and individuals). SK Biopharm, which recorded three consecutive upper limits (ttasang-sangsang) after listing, had a tradable stock ratio of 13%, while SK Bioscience, which only recorded "ttasang," had about 12%.

Of the 12,149,944 shares allocated to institutions, 64.57%, or 7,844,846 shares, were subject to lock-up agreements. By period, 6 months accounted for the largest portion with 3,020,988 shares (24.9%), followed by 1 month with 2,702,640 shares (22.2%), 3 months with 2,087,672 shares (17.2%), and 15 days with 35,922 shares (0.3%). Compared to institutional allocations, this lock-up ratio is higher than SK Biopharm's 52.25% but lower than SK Bioscience's 85.26%, HYBE's 78.37%, and Kakao Games' 72.57%. A lock-up agreement means that the allocated IPO shares cannot be sold for a certain period.

With the failure to achieve "ttasang" on the first day of listing, investors are also anxious about the stock price trend on the following day, the 12th. A securities industry official said, "The key is how much supply institutions release early on, but the institutional lock-up ratio is lower than expected, and institutions perceive that shorter lock-up periods yield higher profits, so it is impossible to predict the trend on the second day of listing. However, considering the lock-up periods, it is unlikely that a large volume of shares will flood the market during trading hours within one month after listing."

Hwang Kyu-won, a researcher at Yuanta Securities, analyzed in a report on the day that "using the discounted cash flow (DCF) method to calculate future earnings at present value, the appropriate stock price range for SKIET is 100,000 to 160,000 KRW until the threat of all-solid-state batteries becomes significant."

Meanwhile, although SKIET's failure to achieve "ttasang" is expected to amplify individual investors' anxiety about IPO investment returns, there are many major IPOs ahead. First, the listing of SD Biosensor, considered a trillion-won scale major IPO, is awaited. As the largest diagnostic kit company in Korea, it filed a preliminary review with the Korea Exchange on January 26. Last year, it achieved sales of 1.6862 trillion KRW, operating profit of 738.3 billion KRW, and net profit of 621.6 billion KRW, surpassing the performance of Seegene, the leading diagnostic kit company. Iljin High Solus, which changed its name from Iljin Composite Materials, is also preparing to debut on the KOSPI market, targeting a corporate value of 2 trillion KRW.

The summer IPO market is expected to be hot. The most notable is Krafton, the developer of the game Battlegrounds. Following that, internet bank KakaoBank and electronic payment platform KakaoPay are also preparing for listing. Krafton's recent market capitalization approaches 25 trillion KRW, and its corporate value is expected to reach 30 trillion KRW upon listing. KakaoBank is attracting attention as the first internet bank to list domestically, with an estimated corporate value of 20 trillion KRW. KakaoPay, previously valued around 7 trillion KRW, has presented a corporate value in the 16 trillion KRW range. The biggest IPO in the second half of the year is LG Energy Solution, a secondary battery specialist spun off from LG Chem. Its corporate value is expected to reach up to 100 trillion KRW, making it the largest in the history of the capital market.

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