[IPO Spotlight] Seamechanics, Reasons Behind Its Success Despite IPO Headwinds

Aluminum Die Casting Technology Holder... Benefiting from Front Market Growth
Expansion of Eco-Friendly Auto Parts Supply for Electric and Hydrogen Vehicles
AI-Based Smart Factory New Plant Established... Responding to Increased Demand with Capacity Expansion

[Asia Economy Reporter Hyungsoo Park] As the Russia-Ukraine situation has led to a risk-averse trend, a cold wind is blowing through the domestic initial public offering (IPO) market. There are increasing cases of companies postponing their listings or setting the public offering price at the lower end of the expected range. Amid generally weakened investor sentiment, Seamechanics, which is pursuing a listing on the KOSDAQ, attracted attention by setting a high public offering price.

According to Shinhan Financial Investment on the 15th, Seamechanics finalized its public offering price at 4,400 KRW. The expected price range presented in the prospectus was 3,500 to 4,000 KRW.

As a result of demand forecasting conducted over two days from the 10th to the 11th targeting institutional investors, a competition rate of 1,812.83 to 1 was recorded. Among the 10 institutions participating in the demand forecast, 9 expressed their intention to subscribe to the public offering shares even at prices exceeding the expected range.

Founded in 1999, Seamechanics is a company that produces automotive and electronic parts based on proprietary aluminum die-casting technology. Its main products include ▲secondary battery parts ▲electric vehicle and electric two-wheeler parts ▲hydrogen vehicle parts ▲internal combustion engine parts ▲display devices.

Seamechanics is strategically fostering its eco-friendly vehicle parts business while steadily growing its electronic parts division. Cho Changhyun, CEO of Seamechanics, said, "We are strengthening our technological competitiveness targeting rapidly growing front markets such as electric vehicles, hydrogen vehicles, and displays," adding, "We will expand overseas and leap forward as a company leading the future eco-friendly vehicle market and high-tech electronics market."

The reasons why Seamechanics was popular in the demand forecast include expectations of benefits from front market growth and the relatively small market capitalization. Based on quality competitiveness, it supplies various products to secondary battery, eco-friendly vehicle, electronic, and display companies. This underpins expectations for stable growth.

Based on increasing demand, it is building a new factory by integrating artificial intelligence (AI)-based smart factory technology. The annual production capacity will be established at over 500 billion KRW. Construction will begin in May and will be gradually completed by 2025. It is also promoting the establishment of production subsidiaries in major export countries for overseas expansion. Through advanced research and development, it plans to preoccupy the market with next-generation technology-applied products and expand overseas markets including North America, China, Europe, and Southeast Asia.

The funds raised through the IPO will be invested in ▲new factory construction and advanced facility expansion ▲strengthening eco-friendly vehicle businesses such as electric and hydrogen vehicles ▲technology advancement and new technology development ▲securing new die-casting process technology ▲marketing for overseas market expansion.

Based on the public offering price, the market capitalization and public offering scale are 116.5 billion KRW and 29.2 billion KRW, respectively. The quantity allocated to institutional investors is 4.66 million shares, worth 20.5 billion KRW. Considering the competition rate, the amount that can be received is inevitably limited.

Researcher Park Jongseon of Eugene Investment & Securities said, "The freely tradable shares after listing account for 28.7% of the total shares, which is a low level," and added, "The scale will grow through business area expansion and diversification of customers."

He continued, "They are supplying hydrogen vehicle air shut-off valve products to Hyundai Kefico," adding, "They are developing parts suitable for Hyundai Motor's next-generation hydrogen vehicles and are also proceeding with orders for mass production."

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