First 'Ddadable' Fails... Secugen Rises 205%, Higher Than 'Ddasang'

Sicugen Performs Well on First Day of Expanded Price Fluctuation Limits
Growing Interest in IPO Subscription Targeting High Returns on Listing Day

Siqusen, the first company to implement the expanded price limit on the day of listing for newly listed companies, closed trading on the 29th at a price higher than 'Ttah-sang' (forming an opening price at twice the IPO price and then hitting the upper limit). The competition for subscription of IPO stocks is expected to intensify in the near future.

According to the Korea Exchange on the 29th, Siqusen recorded a trading volume of 67.3 million shares on its first day of transfer listing from KONEX to the KOSDAQ market. This accounts for 584.5% of the total issued shares. The trading value was 649.5 billion KRW, which is six times Siqusen's market capitalization of 105.4 billion KRW. On that day, only two listed companies in the domestic stock market had a larger trading value than Siqusen: Samsung Electronics (888.5 billion KRW) and Isu Petasys (745.6 billion KRW).

Even when comparing the first-day trading volumes of newly listed companies recently entering the KOSDAQ market, Siqusen's trading volume is overwhelmingly high. The average first-day trading volume of the 10 companies listed before Siqusen was 12.31 million shares. Among them, Curatis had the highest first-day trading volume at 31.26 million shares. Curatis's issued shares numbered 26.88 million, more than twice Siqusen's 11.52 million shares.

Considering the difference in the number of issued shares per company, the turnover rate relative to the number of listed shares shows an even wider gap with Siqusen's record. The average turnover rate for the 10 companies was 76.1%.

The unusually active trading of Siqusen was largely due to the financial authorities expanding the price limit on the listing day of newly listed companies to 60-400% of the IPO price. Previously, the opening price was determined between 90-200% of the IPO price, followed by an upper and lower limit of 30%. This expansion increased the price fluctuation range. In the past, when a 'Ttah-sang' was recorded, sell orders decreased, making trading sluggish. It effectively caused trading to halt, but with the expanded fluctuation range, Siqusen's trading remained active until the market closed.

Siqusen closed at 9,150 KRW that day, up 205% from the IPO price of 3,000 KRW. This price was higher than the 'Ttah-sang' price of 7,800 KRW under the previous trading method. Siqusen's stock price rose to 10,400 KRW early in the session, then dropped to 7,600 KRW around 1:45 PM. Afterwards, buy orders surged again, pushing the price up to 11,800 KRW within an hour. The intraday rise from the lowest to the highest price was 55.3%. The sharply rising stock price gave back most of its gains before the market closed. The closing price of 9,150 KRW was 2.3% higher than the opening price of 8,940 KRW.

Investors who received IPO shares through subscription saw a wide range of returns depending on their selling time, estimated to be between a minimum of 153.3% and a maximum of 293.3%.

It remains to be seen whether the early discovery effect of an appropriate equilibrium price, which the supervisory authorities expected, will materialize, but the activation of the IPO market due to the expanded price limit on the first day of listing is promising. Along with Siqusen, Almek and Innosimulation, which recently conducted IPO subscriptions, recorded high competition rates and absorbed market funds. Almek's subscription deposit reached 8.4725 trillion KRW with a competition rate of 1,355 to 1. Innosimulation raised 3.567 trillion KRW in deposits with a competition rate of 2,113 to 1. Kim Yoon-jung, a researcher at Ebest Investment & Securities, said, "With the expanded market volatility on the listing day, it has become possible to earn 'double-double' profits from the opening price compared to the IPO price," adding, "Investors in newly listed stocks are expected to actively participate in IPO subscriptions before trading on the market after listing."

There are also concerns about side effects from the expanded fluctuation range. Some expect that institutional investors participating in demand forecasting will be more aggressive in selling on the listing day. Although Siqusen's demand forecasting competition rate reached 1,800 to 1, the lock-up agreement ratio was only 12.5%. Many institutional investors offered prices higher than the IPO price range during demand forecasting, but few promised to hold the shares for a while after listing. This revealed a strategy to maximize returns by exploiting high volatility on the first day of listing.

An IPO industry official said, "The authorities are making various institutional improvements to enhance the soundness of the IPO market," adding, "It is still early to evaluate the side effects of expanded volatility on the listing day." He continued, "Confusion is inevitable in the early stages of institutional improvements," and added, "It is necessary to check the impact of the improvement plan when large-scale IPO stocks are listed."

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