This article was published on Aug. 25, 2025, at 4:59 p.m. on the ChosunBiz MoneyMove site.
Myung In Pharm, a traditional pharmaceutical company with 40 years of history known for its dental supplement "Egatam," has significantly lowered its valuation to go public on the securities market. The estimated per-share value of the stocks contributed by the largest shareholder at the launch of the Myung In Multicultural Foundation last year (50,000 won) is 10% lower than the lower end of the public offering price.
Myung In Pharm applied a discount rate of over 47% on the estimated per-share value level of 85,000 won. The company explained that securing the title of a listed company is aimed at global sales, but there are speculations that this is about pressing down on the valuation to resolve inheritance issues.
According to the financial investment industry on the 25th, Myung In Pharm submitted a securities registration statement to the Financial Services Commission on the 21st and has entered the public offering procedure for listing on the securities market (KOSPI). This comes about a month after receiving approval for preliminary listing review from the Korea Exchange at the end of July, and KB Securities has taken the lead in the listing.
The company decided to collect a total of 3.4 million shares entirely through new shares without selling existing shares in this listing. The underwriter proposed a desired public offering price range of 45,000 to 58,000 won. The total amount of funds raised is expected to be around 153 billion to 197.2 billion won, with an estimated post-listing valuation of 657 billion to 846.8 billion won.
Myung In Pharm, established in 1985, is the top pharmaceutical company in the central nervous system specialty drug market, including schizophrenia and depression treatments. It gained recognition with generic drugs like Egatam and constipation medication "Meikin" and grew without external investment, relying solely on its own cash. Its cash assets alone amount to 280 billion won.
According to the securities registration statement, the underwriter utilized the enterprise value to EBITDA (EV/EBITDA) ratio for pricing the public offering. Specifically, the average multiple of enterprise value to EBITDA of comparable companies such as Korea United Pharm, Boryung, and Chong Kun Dang was applied to the EBITDA of 104.5 billion won based on the past 12 months (LTM) as of this year.
The original estimated per-share value was said to have been 85,500 won. However, the company and the underwriter applied a maximum discount rate of 47.4%, lowering the lower end of the desired public offering price range to 45,000 won. A discount rate of 32.2% was also applied at the upper end. This significantly exceeds the average discount rates for listed companies since 2022, which range from 32.8% to 19.9%.
As a result, the valuation has dropped significantly. Myung In Pharm's market capitalization based on the per-share estimated value was around 1.25 trillion won, but it has nearly halved to 657 billion won based on the lower end of the offering price. Notably, had Myung In Pharm calculated its valuation using the price-to-earnings ratio (PER), it could have derived a market cap of over 1.33 trillion won but opted to lower expectations.
The company has set a policy to use this public listing as a means to secure credibility for entering the global market. It has recently partnered with overseas pharmaceutical companies to develop treatments for schizophrenia.
A Myung In Pharm official noted, "The company has been operating as a private entity under the cautious management policy of its founder, Lee Haeng-myung, for over 40 years without external investment," adding, "The push for listing was based on the judgment that a listed company title is necessary as we explore entry into overseas markets."
However, there are concerns regarding the low-cost listing for succession. It is said that Chairman Lee, born in 1949, has chosen listing as a means of equity succession. This is evaluated as necessary for securing significant cash, like taxes, during the succession process, making stock-backed loans easier after the listing.
According to the "inheritance and gift tax law," when valuing shares of a private company for inheritance or gift tax payments, both revenue value and asset value must be considered. It is reported that the largest shareholder family of Myung In Pharm is likely to pay a significant amount of taxes due to the company's strong profitability and financial structure.
The controversy over Myung In Pharm's low-cost listing was also raised in the National Assembly on the 29th of last month. At a National Assembly seminar titled 'What the Democratic Party Needs to Do for Realizing the KOSPI 5000 Era,' Lee So-young, a member of the Democratic Party of Korea, pointed out, "After operating as a private company for 40 years, now that it is time for succession, they are pushing for a listing," addressing the reality that listing tends to lower corporate value in the stock market of Korea.
A source in the financial investment industry said, "Even if Myung In Pharm undertakes succession work, it is expected to proceed once time has passed after the listing and it has drifted away from investor interest," adding, "Considering only the offering itself, it has suggested a relatively low offering price with a higher revenue rate compared to competitors, making it attractive."
금융투자업계 한 관계자는 "명인제약이 승계 작업을 한다고 해도 상장 후 시간이 지나 투자자의 관심에서 멀어졌을 때 진행할 것으로 보인다"면서 "공모 자체만 놓고 볼 때 경쟁사 대비 높은 수익률을 갖추고 비교적 낮은 공모가를 제시했다는 점에서 매력적"이라고 했다.