In January, the first month of the new year, nine corporations will launch initial public offerings (IPOs). Among the corporations challenging the IPO this month, many are what is termed 're-examinees' who had previously attempted to go public but withdrew. These corporations are focusing on stable listings by lowering their valuations and reducing the scale of their listings.
In the second half of last year, the Korean stock market suffered due to the effects of the martial law and impeachment politics, as well as controversies over inflated offering prices, leading to a cold wind in the IPO market. Particularly in the fourth quarter, many newly listed stocks had initial trading prices that were lower than the offering prices. In this situation, new corporations going public are drawing attention.
According to the financial supervisory service's electronic disclosure system on the 4th, the corporations participating in the public offering for general investors in January include LG CNS, Meatbox Global, Asterasis, Day One Company, Wisenut, Samyang NCKH, Winners, Igenet, and PII, totaling nine (excluding special purpose acquisition companies).
A particularly notable point is that many re-examinee and third-time applicants are in this year's first half IPOs. Many of these have lowered their desired offering price ranges or reduced the number of offered shares compared to before. They have established self-recovery measures aimed at entering a still-cold stock market stably.
A representative example is LG CNS, which is attempting to go public on the Korea Exchange for the first time this year. LG CNS, a system integration (SI) company, is a subsidiary that provides IT services to the LG Group. LG CNS had selected a lead underwriter in 2022 to prepare for an entry into the stock market but did not pursue the listing at that time. At that time, as interest rates rose, uncertainty in the domestic economy and stock market increased, and it was judged difficult to raise sufficient funds as the stock prices of its competitor, Samsung SDS, fell.
Despite unfavorable conditions surrounding the stock market at the start of the new year, LG CNS has lowered its expectations and re-prepared for listing.
Corporations aiming to go public calculate their offering prices based on the price-earnings ratio (PER) of competing companies already trading in the stock market. LG CNS has excluded the global software company Accenture from its offering price calculation, which had been included three years prior. Accenture's PER was around 31 times, and the estimated PER based on 2024 performance is also around 29.9 times.
The PER is calculated by dividing the stock price by earnings per share, meaning that the higher this figure, the more the stock price is high relative to performance. Excluding corporations with a high PER from the comparison is interpreted as a decision to allow for a lower offering price. Instead, Samsung SDS, Hyundai AutoEver, and Japan's NTT Data Group were chosen as comparative corporations, applying an average PER of 22.6 times to determine the offering price.
A high discount rate was also applied. LG CNS applied a discount rate of over 30% to the evaluated price per share of 89,378 won. The discount rate for corporations listed on the Korea Exchange last year was in the 15% range.
Accordingly, LG CNS has indicated a desired offering price range (band) of 53,700 to 61,900 won. Based on the upper limit of the band, the total amount to be raised is estimated at 1.1994 trillion won, and the market capitalization after listing is estimated to be 5.9972 trillion won. LG CNS plans to conduct demand forecasting from the 9th to the 15th and accept general subscriptions on the 21st and 22nd. However, concerns have been raised that the high proportion of existing shares being sold might be a hindrance.
Meatbox Global, a livestock product direct trading platform, will also lower its valuation and attempt to go public again at the start of this month. Meatbox Global had planned to list on the KOSDAQ last year but withdrew the listing plan, anticipating weak demand. Meatbox Global has maintained the number of offered shares at 1 million but lowered its desired offering price range from the existing 23,000 to 28,500 won to 19,000 to 23,000 won. Meatbox Global will participate in general subscriptions from the 13th to the 14th.
Wisenut, an artificial intelligence (AI) specialist preparing for a KOSDAQ listing, drastically reduced its offering volume. Wisenut initially planned to offer 1.7 million shares but has cut the scale to nearly half at 900,000 shares. A reduction in the amount of offered shares decreases circulation volume, alleviating concerns about overhang (potential selling volume), which could work positively for investors. Wisenut will accept general subscriptions from the 15th to the 16th.
Furthermore, ISティー, a semiconductor equipment corporation, is also a 're-examinee' for IPOs. ISティー announced on the 2nd that it has submitted a securities report and has begun the offering process for a KOSDAQ listing. ISティー had attempted to list last year but postponed the offering schedule citing instability in the Korean stock market. This time, it reduced the amount of shares offered from the previous 1.6 million to 1.3 million. The desired offering price range (band) remains the same as last time, at 9,700 to 11,400 won.
In the third week of this month, companies such as Asterasis, which manufactures beauty medical devices (14th to 15th), Day One Company, an online education content provider (15th to 16th), Samyang NCKH, a precision chemical company (16th to 17th), and Winners, a smart wiring system specialist (17th to 20th), will participate in general subscriptions. In the fourth week, PII, a secondary battery testing equipment company (20th to 21st), and Igenet, an AI-based insurtech company (20th to 21st), will also participate in general subscriptions.
Meanwhile, K Bank, an internet-only bank and a 'third-time' candidate, is contemplating a listing challenge. K Bank delayed its listing schedule due to weak demand forecasts in both 2023 and last year. In the institutional investor demand forecasting held in October of last year, it was reported that they set the desired offering price range (band) at 9,500 to 12,000 won but failed to fill the allocated offering volume for institutions. K Bank obtained preliminary approval for listing at the end of August last year, and since the validity of this preliminary approval lasts for six months from the date of approval, they must complete the listing by February this year.