Key Takeaways
- South Korea’s IPO market is gearing up with twelve companies aiming for listings on the Kosdaq, including Aimed Bio and CMTX Co.
- Investor interest remains high due to recent successful IPOs, with average returns of 51.5% on debut trading days.
- Regulatory changes mandate institutional investors to commit to lock-up periods for over 40% of shares in IPOs.
Momentum in South Korea’s IPO Market
Following the mid-autumn harvest festival, South Korea’s IPO market is poised to recover. Biotechnology, semiconductor, and content firms are leading the charge with twelve companies having submitted registration statements to the financial regulator for listings on the Kosdaq. These firms intend to expedite their IPO processes, with some conducting bookbuildings as early as this month.
Notably, Aimed Bio Inc., a developer of antibody-drug conjugates (ADC), aims for a valuation of up to 705.7 billion won ($497.3 million) despite reporting net losses. The growing interest in targeted cancer therapies boosts investor confidence. Retail and institutional subscriptions for Aimed Bio are set for Nov. 13-14.
CMTX Co., a semiconductor equipment provider and a tier 1 supplier to TSMC, is targeting a maximum cap of 561.2 billion won, with an operating profit of 26.3 billion won in the first half of the year. Subscriptions are scheduled for Nov. 10-11.
Additionally, The Pinkfong Company Inc., famous for the viral Baby Shark video, has a market cap target of 545.3 billion won. Its operating profit soared to 18.8 billion won last year, driven by international expansion. Subscriptions for Pinkfong will occur on Nov. 6-7.
Other smaller firms, such as Nota Inc. and Vitzronextech Co., are also planning IPOs this month, aiming for market caps between 100 billion and 200 billion won. Meanwhile, companies like SemiFive and QuadMedicine are expected to submit registration statements soon for upcoming IPOs.
Investor enthusiasm for IPOs is buoyed by recent high returns. Myungin Pharm Co. saw its shares close at 121,900 won, more than double its IPO price, while S2W Inc. experienced an 81.44% increase on its debut day. The third quarter yielded an average return of 51.5% on the first trading day of new listings.
To regulate the process, South Korea now mandates that over 40% of shares allocated to institutional investors must be assigned to those who consent to lock-up periods. If this commitment isn’t met, underwriters are required to purchase 1% of the total public offering and hold it for six months.
As interest in IPOs remains robust, industry sources anticipate a vibrant market ahead, driven by both established and emerging companies eyeing public offerings in the coming months.
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