Hyundai Oilbank Withdraws for the Third Time Amid a Collapsed Stock Market

"Difficulty in Properly Valuing Corporate Worth Due to Stock Market Slump"
KOSPI Down 20.1% Since Early This Year
First Half KOSPI Trading Volume Down 43.3% YoY
First Half Settlement Amount Down 27.3% YoY
Refining Stocks Rise This Year Due to High Oil Prices
Recent Decline Amid Possibility of Economic Recession

[Asia Economy Reporter Hwang Yoon-joo] Hyundai Oilbank, considered one of this year’s largest initial public offerings (IPO), has also succumbed to the sluggish stock market caused by a strong tightening stance. This marks the fifth company to withdraw its public offering this year. The reason behind Hyundai Oilbank’s decision to withdraw its IPO is interpreted as a decline in investor sentiment due to the sluggish stock market.

A senior official from Hyundai Oilbank said on the 21st, "S-Oil barely remains in the 90,000 won range, and SK Innovation has fallen significantly, indicating that refining stocks are undervalued," adding, "This decision was made after comprehensively considering the current market conditions, including the sluggish stock market."

This means that the current market atmosphere makes it difficult for companies to receive proper valuation. In fact, the KOSPI index plunged 20.1% from 2,988.77 on January 3 to 2,386.85 as of the previous day.

Both trading volume and settlement amounts have significantly decreased compared to the previous year. Trading volume refers to the total amount bought and sold in the market on trading days, while settlement amount refers to the actual amount paid after clearing the trading volume.

In the first half of this year, the KOSPI trading volume was 1,263 trillion won, down 43.3% from 2,230 trillion won in the same period last year. During the same period, stock settlement amounts were 20.39 trillion won, a 27.3% decrease from 28.03 trillion won in the previous year. This is also an 11.6% decrease compared to the second half of last year (23.06 trillion won). This indicates a significant decline in investor sentiment.

From Hyundai Oilbank’s perspective, despite expectations of strong performance, it faces a situation where it must take risks in the public offering market. Refining stocks began to rise early this year due to the Russia-Ukraine war. S-Oil is a representative example. S-Oil reached a peak of 123,000 won intraday on June 13 but declined to close at 93,700 won the previous day. S-Oil is considered a stock focused on its core refining business and benefited the most during the high oil price period in the first half of the year. However, as the possibility of an economic recession grows recently, its stock price has been on a downward trend.

Hyundai Engineering, SK Shieldus, One Store, and Taelim Paper, which previously withdrew their IPOs, are all in similar situations. They cited market conditions, stating that "despite excellent performance, it is difficult to receive proper valuation" when withdrawing their public offering plans.

An official from a foreign venture capital firm said, "Recently, the investment industry is also in a wait-and-see mode, halting investments," adding, "For example, a startup valued at 10 billion won last year is now valued at 4 billion won, indicating a trend of corporate value adjustment." A Hyundai Oilbank official said, "There has been no review of future plans or directions following the withdrawal of the IPO."

Meanwhile, Hyundai Oilbank filed for preliminary listing review in 2012 but gave up on listing due to management deterioration caused by falling international oil prices. It attempted to list again in 2018 but stopped due to evaluations falling short of expectations. Despite the current high oil price environment, this year’s IPO withdrawal due to the sluggish stock market marks the third failed attempt at going public.

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