Depressing IPO Company Report Card... "Focus on Corporate Fundamentals"

Average Return of 110 Newly Listed Stocks at 14.02%
"Cannot Be Sustained as Long-Term Returns"

[Asia Economy Reporter Lee Myunghwan] The frenzy in the initial public offering (IPO) market, which reached an all-time high last year, has cooled down this year, and the returns of newly listed companies have also fallen short of expectations. Securities firms advised focusing on the fundamentals of companies rather than riding the IPO wave.

On the 21st, an analysis by Asia Economy of data from the Korea Exchange showed that the average return compared to the offering price of 110 newly listed stocks on the KOSPI and KOSDAQ markets from January 3 last year to April 20 this year was 14.02%. Looking at the returns of newly listed stocks by market, KOSPI recorded 20.75%, and KOSDAQ 12.95%, with KOSPI returns being somewhat higher.

On KOSPI, Hyundai Heavy Industries, which was considered a major IPO in September last year, posted the highest return. Hyundai Heavy Industries, which had an offering price of 60,000 won, closed at 149,000 won on the 20th, rising 148.33% compared to the offering price. SK Bioscience also rose 106.15%. On the other hand, Hancom Lifecare (-49.12%) and Krafton (-48.19%) fell nearly 50%, halving their value.

Cho Changmin, a researcher at Yuanta Securities, diagnosed, "The reason the appeal of IPOs is declining is because the stock prices of listed companies are sluggish," adding, "The high returns of newly listed companies in the early stages did not translate into long-term returns."

Profit forecasts for newly listed companies are also declining. According to Yuanta Securities' analysis, the operating profit forecasts for LG Energy Solution, Kakao Bank, Kakao Pay, and Krafton for this year were revised downward from 3.6 trillion won at the beginning of January to 2.4 trillion won on the 19th. If downward revisions continue this year, it is analyzed that the uncertainty investors feel about newly listed companies will further increase.

Securities firms advised prioritizing the fundamentals of IPO companies. Researcher Cho said, "‘Big fish’ expected to exceed a market capitalization of 1 trillion won are planning to go public this year," adding, "Since they are receiving high valuations reflecting growth expectations, attention should be paid to their actual fundamentals after listing."

Meanwhile, the IPO market, which has been quiet this month, is expected to regain momentum starting next month with the subscription of SK Shielders and One Store. Car-sharing company Socar and Market Kurly, which operates Kurly, are also pushing for KOSPI listings.

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