New Year IPO Market, a Feast Table with Nothing to Eat

Even as the year changes, the domestic initial public offering (IPO) market is struggling to recover. Controversies over overvaluation in setting the offering price persist. Since the second half of last year, cases of investors in public offerings incurring losses have continued.

According to the financial investment industry on the 4th, Day One Company saw its stock price drop 43% from the offering price of 13,000 won just three days after its new listing on the KOSDAQ market on the 24th of last month. On the first day of listing, it closed at 7,800 won, down 40% from the offering price. Even if investors sold their shares at the highest price after listing, 11,000 won, they suffered losses of more than 15%.

원본보기 아이콘

Newly listed companies Meatbox and Wisnet last month were no different. Wisnet, which was listed on the same day as Day One Company, fell 36.5% on the first day. Meatbox, which entered the KOSDAQ market on the 23rd of last month, dropped 25.3% from the offering price on its first day.

Among the newcomers entering the domestic stock market this year, only Asterasis saw its stock price rise 65.9% from the offering price of 4,600 won. On the first day of listing, it rose 44.4% from the offering price and has continued to show a steady upward trend since. Asterasis is a beauty medical device company, with exports accounting for more than 70% of its total sales.

Na Seung-du, a researcher at SK Securities, explained, "Although it has not been long since the companies were newly listed, the simple average return rate is below -35% compared to the offering price," adding, "I worry that the controversy over overvaluation of offering prices seen last year may continue this year as well."

Ten prospective listed companies conducted demand forecasting targeting institutional investors last month and disclosed the results. Three companies set their offering prices below the lower end of the desired price range, while the remaining seven set their offering prices at the upper end of the desired range.

Among the five companies that completed demand forecasting, received public subscription from general investors, and finalized their listing, four are trading below their offering prices. Samyang NC Chem, which was listed the day before, started trading at 23,650 won, higher than the offering price of 18,000 won, but closed at 17,960 won. This is about a 33% drop from the intraday high of 26,800 won. Institutional investors net sold 36.7 billion won worth of Samyang NC Chem shares on the day of listing.

Although the returns on public offering investments have hit bottom, interest in LG CNS, a major player in the IPO market, is steadily rising. For the public subscription of LG CNS shares targeting general investors, more than 21 trillion won in deposits were collected. It will be listed on the KOSPI market on the 5th. Park Jong-sun, a researcher at Eugene Investment & Securities, said, "After major companies such as HD Hyundai Marine Solutions, Shift Up, and APR successfully completed their IPOs last year, LG CNS, the first major stock to be listed this year, is going public," adding, "Considering that the offering price was set at the upper end of the desired range, it is expected to successfully settle in the domestic stock market."

원본보기 아이콘

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.