Doosan Enerbility's Czech subsidiary, Doosan Škoda Power, is leveraging its high dividend yield to attract interest in its initial public offering (IPO). Scheduled for local listing on the 6th of next month, Doosan Škoda Power has decided to distribute at least 70% of its net income as dividends to shareholders. This figure surpasses the dividend policies of other Doosan Group affiliates listed on the domestic stock market.
According to a prospectus sent by Doosan Škoda Power to local institutional investors on the 31st, it adopted the policy of distributing at least 70% of its net income as dividends. However, this will only proceed if sufficient cash is available and financial stability is maintained.
Doosan Škoda Power manufactures and sells steam turbines for nuclear power plants in the Czech Republic. If Korea Hydro & Nuclear Power secures the contract for the new Dukovany nuclear power plant, turbines produced by Doosan Škoda Power will be installed there. In 2023, Doosan Škoda Power reported a revenue of 4.81 billion koruna (approximately 289.4 billion won) and an operating profit of 483.02 million koruna (approximately 29 billion won). The net income stood at 559.34 million koruna (33.6 billion won). The provisional results for the first nine months of last year were similar to the previous year's levels.
The dividend yield of Doosan Škoda Power is estimated to be between 3% and 4% based on the offering price, the highest among Doosan Group affiliates. Doosan Bobcat paid cash dividends twice last year, with a market dividend rate of 1.6%. As for the holding company Doosan, it carried out a settlement of account dividend of 2,000 won per common share in 2023, resulting in a market dividend rate of 2.1%. Doosan Enerbility has not issued cash dividends for common shares since 2017, and Doosan Robotics also did not distribute dividends following its listing in October 2023.
The prospectus also hinted at potential additional fundraising. Doosan Škoda Power noted that it might consider issuing preferred shares as a precaution. Preferred shares receive dividends before common shares, which could reduce the amount of dividends available to common shareholders.
With the IPO of Doosan Škoda Power, its largest shareholder, Doosan Enerbility, is expected to secure up to 120 billion won. The total number of shares being offered by Doosan Škoda Power is up to 10,527,000. In addition to the issuance of new shares (2.9 million), Doosan Enerbility intends to sell 6,670,000 existing shares. To stabilize the market, the underwriter has the option to allocate 10% (95,700 shares) of the total offering to institutional investors and existing shareholders.
The offering price range for Doosan Škoda Power is set between 220 and 260 koruna (approximately 13,200 to 15,600 won) per share. Based on the offering price, the maximum market capitalization is projected to be 164 billion won. Since the 27th, corporate briefings and order receipts have been underway, with the finalized offering price and share allocation results to be announced on the 5th of next month. Following this, trading is expected to commence on the 6th in the prime market of the Czech stock exchange, where quality companies are listed.