Although the stock market rally is bringing warmth to the public offering market, a cold wind still blows in the large-cap initial public offering (IPO) market. Most of the successful public offerings in the first half of this year were small and medium-sized stocks that entered the KOSDAQ market. The number of large-cap listings in the securities market has actually decreased compared to last year.
For a full-blown public offering frenzy to occur, the listing of large-cap stocks is required. However, only small and medium-sized public offerings are gaining momentum, leading industry voices to call for an easing of the so-called 'overvaluation' practices where large companies expect excessively high valuations.
According to the Korea Exchange, a total of 42 corporations were listed in the first half of this year. While the number of corporations listed decreased by 17 compared to the same period last year, interest from investors is rising as a cold wave of public offerings that began at the end of last year is subsiding.
In particular, there have been several cases of achieving 'double' (doubling from the public offering price) on the day of listing. Recently listed artificial intelligence big data analysis company NewN AI succeeded in doubling its stock price on the day of its KOSDAQ listing. Previously listed GFC Life Science and electronic component wire production company Kistron also saw their stock prices rise by 112% and 168%, respectively, on their listing days.
However, the companies that have recently attracted attention in the public offering market were mostly small and medium-sized stocks in the KOSDAQ. Although 42 corporations were listed in the first half of this year, only four large-cap stocks were listed in the securities market. This accounts for only 9% of all corporations, a 33% decrease compared to the same period last year.
Recently listed cosmetics company d'Alba Global performed well, rising 66% from its public offering price on the day of listing, but there were no other large-cap stocks showing significant upward trends.
In the case of LG CNS, which attracted attention as the first large-cap initial public offering (IPO) of the year, the stock fell 9.85% compared to the public offering price (61,900 won) on its listing day. Recently, it managed a significant rebound thanks to the AI craze, but many public offering investors have already cut their losses.
Some companies have also withdrawn their listing plans. LOTTE Global Logistics, a logistics subsidiary of the Lotte Group, and DN Solutions have retracted their listing plans. Both companies postponed their plans due to weak demand forecasting from institutional investors.
Experts believe that for the public offering market to show a full-blown boom, large-cap stocks must perform well, but they report that recovery has not yet reached that point.
The cause of the sluggish performance of large public offerings is still said to be the high valuations. During the COVID-19 period, large public offerings, such as SK bioscience, KRAFTON, and KakaoBank, gained attention due to low interest rates, leading to excessive valuations of companies, a practice that is still continuing.
Yun Cheol-hwan, a researcher at Korea Investment Securities, noted, 'The large public offerings that received excessive overvaluation during the COVID-19 period have yet to recover. The market environment has changed, but companies that once received high valuations are not willing to lower their prices, delaying their market debuts.'
Experts advise that for large-cap public offerings to perform well, realistic corporate valuations must be established. Researcher Yun stated, 'Large-cap stocks need to concede on their valuations.'
Investor interest is focused on the public offering of Daehan Shipbuilding. The estimated market capitalization of Daehan Shipbuilding is 1.9263 trillion won, making it the second-largest after LG CNS, which went public earlier this year.
Expectations are rising that Daehan Shipbuilding's IPO will succeed as the domestic shipbuilding industry enters a boom period. Daehan Shipbuilding's anticipated public offering price range is set between 42,000 won and 50,000 won, with the upper limit estimated to raise 500 billion won.
Daehan Shipbuilding will conduct demand forecasting for domestic and international institutional investors until the 17th of this month. It will then accept general subscriptions on the 22nd and 23rd.