This Year, New Companies' Average Stock Price Doubles Their IPO Price

Stock Prices of 16 Companies Rise by an Average of 111% Compared to IPO Price
Impact of Strict IPO Price Evaluation and Unexpected Strong Performance in Q1 Stock Market

Newly listed stocks that debuted on the stock market this year are all sailing smoothly with double-digit price increases. Although the IPO market conditions at the beginning of the year were unfavorable due to a severe tightening of monetary policy continuing from last year, companies that succeeded in going public despite the downturn are receiving good results in the market.

According to the Korea Exchange on the 24th, the stock prices of 16 companies listed this year (excluding REITs and SPACs) recorded an average increase of 111% compared to their offering prices (based on closing prices as of April 20). This means that the current stock prices of companies listed this year are on average more than double their offering prices.

The company with the highest price increase compared to the offering price is Mirae Semiconductor, which was listed on January 27. It ranked first among newly listed companies with a 333% increase. The stock price rose from the offering price of 6,000 KRW to 26,000 KRW as of the closing price on the 20th. Mirae Semiconductor also reached a new high of 37,900 KRW intraday on the 7th. Interest was intense during the early-year demand forecast, with an institutional competition rate of about 1,577 to 1. A representative from Shinhan Investment Corp., the lead underwriter for Mirae Semiconductor’s listing, explained, "The increasing proportion of system semiconductors, the company’s future growth potential, and its higher operating profit margin compared to its peer group seem to have contributed to the IPO’s success."

Kumbee, underwritten by Kiwoom Securities, ranked second with a stock price increase of 329% compared to its offering price of 5,000 KRW. Following were J.O (148.46%), Obzen (124.44%), and Nanoteam (123.46%) in order.

Among the stocks listed this year, the company with the lowest price increase compared to the offering price was Bioinfra, with an 18.81% increase. Next were LB Investment (19.41%) and Innojin (28.5%). Although these companies lagged behind other newly listed stocks in terms of price increase, they still showed double-digit growth.

During the IPO boom periods of 2021 and last year, there were frequent cases where newly listed stocks failed to reach their offering prices, leading shareholders to exercise their redemption rights. Redemption rights allow individual investors who received IPO shares to sell them back to the lead underwriter at 90% of the offering price if the stock price falls within a certain period after listing. Stocks debuting on the market this year have all shown an upward trend compared to their offering prices, so this does not apply. This is interpreted as a result of more rigorous valuation during the IPO process due to the sharp contraction of the IPO market from the second half of last year to early this year.

However, no company has recorded a public offering amount exceeding 100 billion KRW in the IPO market this year. So far, TMC has the largest offering size at 61.6 billion KRW. Companies that had high market expectations, such as K-Bank, Kurly, and Oasis, postponed their listings one after another as their valuations fell short of expectations. Choi Jong-kyung, a researcher at Heungkuk Securities, said, "Although there was a strong performance of newly listed companies in the IPO market in February and March, the fact that there are currently 'zero' new listings on the KOSPI and the average market capitalization based on the offering price of new KOSDAQ listings is 145.1 billion KRW suggests a 'half-hearted resilience' focused on small and mid-cap stocks."

It is expected that listings will continue to be centered on small and mid-sized companies in the second quarter and beyond. Park Jong-sun, a researcher at Eugene Investment & Securities, said, "The number of companies preparing for listing in the second quarter is expected to remain at a good level. Among companies approved for review, there are almost no 'big fish,' and most listings will be centered on small and mid-sized companies."

In the market, investor expectations are rising as EcoPro Materials is reportedly about to submit a preliminary review application for listing, following the 'EcoPro Trio' (EcoPro, EcoPro BM, EcoPro HN) that heated up the stock market at the beginning of the year. Mirae Asset Securities and NH Investment & Securities have been selected as joint lead underwriters and are pushing forward with the listing. Olive Young, which postponed its listing once last year, is also expected to make a re-challenge this year based on its record-high performance last year.

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