Hanwha General Chemical, K Car, ADT Caps join Kospi IPO pipeline for this year

South Korean companies are rushing with initial public offerings while the market conditions are favorable.

Hanwha General Chemical Co. and used car retailer K Car Co. have each submitted IPO applications for preliminary review with Korea Exchange last Friday. The preliminary IPO review usually takes about 45 days.

Hanwha General Chemical, formerly Samsung General Chemical founded in 1974, joined Hanwha Group in 2015 after the conglomerate acquired Samsung’s defense and chemical units. Hanwha General Chemical produces purified terephthalic acid (PTA), a primary component of polyester fiber and polyethylene terephthalate (PET) bottles.

The company is the country’s No. 1 PTA maker with a comfortable lead to local rivals – Samnam Petrochemical Co., Taekwang Industrial Co., and Hyosung Chemical.

Last year, Hanwha General Chemical raised 244 billion won ($219.7 million) in operating income on sales of 1.2 trillion won on a separate basis. Market insiders estimated the company to be worth up to 5 trillion won upon joining the market.

K Car, formerly SK Group’s used car brand SK Encar whose stake was fully acquired by Hahn & Company in 2017, is also readying for an IPO with some stake offer from the PEF.

K Car’s value could be referred to the cases of foreign players like Arizona-based Carvana, an online used car retailer that debuted on New York Stock Exchange four years after establishment as it makes the first used car stock in Korea.

Last year, K Car raised 37.7 billion won in operating income on a separate basis on sales of 1.3 trillion won.

Korea’s leading security monitoring and dispatch service provider ADT Caps is also another IPO aspirant this year.

Last week, the company hired NH Investment & Securities, Morgan Stanley, and Credit Suisse as lead managers, and launched a working-level IPO team with an aim to go public on the main bourse this year.

SK Telecom Co., in a consortium with financial investor Macquarie PE, acquired ADT Caps from Carlyle Group for 2.97 trillion won in 2018. Insiders noted that Macquarie PE will be able to recoup its investment once ADT Caps goes public.

In March, ADT Caps merged with SK Infosec to expand its business scope as a comprehensive security service provider. Last year, the company raised 140.9 billion won in operating income on sales of 1.3 trillion won.

ADT Caps envisions valuation of around 4 trillion won to 5 trillion won.

An unnamed market watcher said that companies are rushing with IPOs before squeeze in the ample liquidity when interest rates move up.

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