[IPO Spotlight] SD Biosensor②, Early Stage of 4th Wave... Will Subscription Be Successful?

[Asia Economy Reporter Hyungsoo Park] As the number of new COVID-19 cases surges, expectations are rising for SD Biosensor, a COVID-19 diagnostic kit company preparing to list on the KOSPI market. After controversy over the high initial public offering (IPO) price range emerged in early last month, the company lowered its expected IPO price range, and with growing concerns about the fourth wave, subscription competition is expected to be fierce.

According to SD Biosensor on the 8th, the demand forecast for determining the IPO price recorded a competition rate of 1,143.76 to 1, finalizing the IPO price at 52,000 KRW. Based on the IPO price, the expected market capitalization is 5.37 trillion KRW.

During the two-day demand forecast held from the 5th to the 6th, 1,389 institutional investors participated. Among them, 1,333 institutions (95.97%) offered a purchase price of 52,000 KRW or higher.

Well known for selling COVID-19 self-test kits, SD Biosensor is a leading company in the COVID-19 diagnostic market. The Standard Q, developed by SD Biosensor, uses the principle of antigen and antibody reactions to diagnose the presence of disease within 10 to 30 minutes using a very small sample. This enables rapid response when new infectious diseases emerge. SD Biosensor received emergency use authorization in South Korea in February last year. It has also been approved by the WHO and the EU for export. Last year, overseas sales accounted for a large portion, with Europe making up 41% and India 32% of sales by region.

Last year, SD Biosensor recorded sales of 1.6861 trillion KRW, operating profit of 738.3 billion KRW, and net profit of 621.6 billion KRW. The sales scale grew 23 times compared to 73 billion KRW in 2019. The export of COVID-19 diagnostic kits drove this growth. In the first quarter of this year, SD Biosensor posted sales of 1.1791 trillion KRW, operating profit of 576.3 billion KRW, and net profit of 437.5 billion KRW. The company continued its growth based on technological competitiveness that can test for variant viruses.

An SD Biosensor official stated, "We have grown explosively based on our research and development capabilities, overseas sales network, quality control system, and production capacity," and introduced, "SD Biosensor developed molecular diagnostic PCR reagents within six weeks after the COVID-19 genome sequence was first disclosed in January last year." He continued, "By the seventh week, we completed the development of the antigen rapid diagnostic kit," emphasizing, "We were the first in the world to receive WHO Emergency Use Listing (WHO EUL) approval for the COVID-19 antigen rapid diagnostic product."

SD Biosensor plans to raise 647 billion KRW through its IPO. The funds will be invested in installing automated production facilities for on-site molecular diagnostic devices (M10) and fluorescent immunoassay devices (Standard F).

Lee Hyogeun, CEO of SD Biosensor, said, "Even after the development of COVID-19 vaccines, the number of confirmed cases domestically and internationally has not decreased due to variant viruses," adding, "As a company protecting human health, we will do our utmost to end COVID-19 and leap forward from being a leading domestic in vitro diagnostic company to becoming the world's number one global on-site specialized in vitro diagnostic company."

General investor subscription for SD Biosensor's IPO will be held for two days until the 9th. General investors can apply for subscription through NH Investment & Securities and Korea Investment & Securities. As the fourth wave begins and new COVID-19 cases surge, stocks related to diagnostic kits are rising again in the domestic stock market. Seegene's stock price, which fell below 60,000 KRW in early last month when vaccination rates were high, recovered to around 80,000 KRW within a month. Its market capitalization is about 4.6 trillion KRW. Seegene recorded sales of 351.8 billion KRW and operating profit of 193.9 billion KRW in the first quarter, increasing by 330% and 388% respectively compared to the same period last year.

Considering Seegene's performance and market capitalization, expectations for SD Biosensor's IPO success are growing. When submitting its securities registration statement in May, SD Biosensor proposed an IPO price range of 66,000 to 85,000 KRW. However, as stocks related to diagnostic kits, including Seegene, peaked in April and then declined, concerns about overvaluation of SD Biosensor's IPO price arose. Eventually, SD Biosensor lowered its IPO price range to 45,000 to 52,000 KRW. With the reduced fundraising scale, the budget for acquiring securities of other companies was excluded from the fund usage plan.

Choi Jongkyung, a researcher at Heungkuk Securities, explained, "SD Biosensor can develop antigen and antibody diagnostic reagents within one month," adding, "It has the advantage of being able to quickly develop products even if new infectious diseases emerge."

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