This article was published on July 24, 2025, at 3:48 p.m. on the ChosunBiz MoneyMove website.
The shipbuilding materials corporation S&SYS has announced that it will make a public offering this year, the largest scale on the KOSDAQ market, capitalizing on the shipbuilding industry's boom. It aimed to raise 57 billion won at the upper end of the proposed price range. This exceeds the 50 billion won of Orum Therapeutics, which had the largest public offering amount among newly listed companies on the KOSDAQ this year.
After listing, it valued itself at 280 billion won. To bolster its valuation, it selected HD Hyundai Marine Solution, which has a market capitalization of 8 trillion won, as a comparable company. While it did use adjusted net income excluding corporate tax refunds as the basis for its valuation, the market is reacting that the valuation is excessive.
According to financial investment industry sources on the 24th, S&SYS will begin the KOSDAQ public offering process on the 28th, starting with demand forecasts for institutional investors. On June 19, it received preliminary examination approval from the Korea Exchange and submitted a securities registration statement on the 22nd of the same month, following two revisions.
If all goes as planned, it will enter the KOSDAQ market next month. It will conduct demand forecasting until the 1st to finalize the public offering price, followed by a subscription period for general investors from the 7th to the 8th over two trading days. The amount of shares being offered is set at 1.9 million shares (with 105,000 shares for existing shareholders), and the proposed offering price range is set between 27,000 won and 30,000 won.
S&SYS was established in June 2017 as a spin-off from the electrical and control division of Samsung Heavy Industries, which had suffered from the worst order drought in 2016, leading the company to restructure during the protracted downturn of the shipbuilding industry at that time. The current chief executive, Jae-hyuk Bae, took over the division along with the employees.
The company believes that this year, marking its eighth year of independent operations, is the optimal time for an IPO. Since the international agreement signed in 2017 mandated the installation of ballast water treatment systems to protect the marine ecosystem, and the increase in new ship orders and rising new building prices starting from 2021 indicate a significant improvement in performance, the timing seems right.
In fact, S&SYS's revenue last year was 138.1 billion won, nearly seven times the 19.8 billion won from the first year of its independence in 2017. Expanding its business scope to include ship control systems has also effectively contributed to performance improvement. Notably, its operating profit surged from 900 million won to 15.4 billion won during the same period.
Moreover, the continuing surge in the stock prices of shipbuilding companies during this supercycle has also contributed to the timeliness of the IPO. U.S. President Donald Trump's remarks about possible cooperation with Korea's shipbuilding industry have heightened performance expectations, leading Samsung Heavy Industries' price-to-earnings ratio (PER) to exceed 110 times.
The company is optimistic about its success in attracting interest. Based on a net income of 22.4 billion won over the past 12 months as of the first quarter, it calculated a market capitalization of 398.4 billion won, excluding the corporate tax refund amount. Subsequently, after applying a maximum discount rate of 36%, it presented a post-listing valuation of 283.2 billion won.
The key factor will be market acceptance. This is due to the application of a PER multiple of 21.6 times to present a market capitalization of 283.2 billion won, based on the adjusted net income of 18.5 billion won. In particular, it adopted HD Hyundai Marine Solution, a KOSDAQ company with a market capitalization of 8.3 trillion won that specializes in ship after-sales service, as a comparable company, raising the PER multiple.
S&SYS has specifically selected four comparable companies: Sejin Heavy Industries, Hanla IMS, KSP, and HD Hyundai Marine Solution, which produce ship cabins. Excluding HD Hyundai Marine Solution, which has a high PER of 32.85 times, the average PER of the three comparable companies drops to about 17.85 times.
An industry source in the securities sector noted, "HD Hyundai Marine Solution is a unique company in the niche of being a specialized after-sales service subsidiary of HD Hyundai," adding that "during the IPO promotion last year, HD Marine Solution brought in global companies from different sectors due to the difficulty of establishing comparable companies, but S&SYS has selected it as a comparable company."
Some in the market are expressing the view that investor interest in S&SYS may not reach the level of Daehan Shipbuilding, which successfully attracted demand forecasts amid the recent boom in the shipbuilding industry. Daehan Shipbuilding enjoyed a favorable market assessment, using the price-to-book ratio (PBR) for calculating enterprise value.
Daehan Shipbuilding also benefited from using the PER method. With the average PER of four companies—HD Hyundai Heavy Industries, Hanwha Ocean, Samsung Heavy Industries, and HD Hyundai Mipo—standing at 41.9 times, it was possible to propose a market capitalization of 8 trillion won, but it calculated a maximum figure of 1.9 trillion won based on PBR, which resulted in lower per share offering prices.
S&SYS and the lead underwriters explained, "Considering that S&SYS also has a ship maintenance, repair, and overhaul (MRO) business, we selected HD Hyundai Marine Solution, as well as choosing PER instead of PBR, considering it as a growth-oriented company focused on new businesses."
Meanwhile, S&SYS plans to invest around 54 billion won of the public offering funds, excluding some repurchase of shares from Samsung Heavy Industries, which participated as a shareholder when the company was established eight years ago, in expanding production capacity. It has also set a goal of constructing a new factory. Samsung Heavy Industries aims to recover up to 3.2 billion won by selling 105,000 shares.