Flurry of IPO activity defies lethargic Korean economy

With a streak of companies readying themselves to go public, including a potentially billion-dollar valued robotics supplier, investor expectations are growing amid a slow market in Korea.

An image of a stock market display screen [SHUTTER STOCK]

With a streak of companies readying themselves to go public, including a potentially billion-dollar valued robotics supplier, investor expectations are growing amid a slow market in Korea.

A total of nine companies are to initiate a book building for an initial public offering (IPO) on the Kospi and Kosdaq bourses in September alone, according to the Korea Exchange.

Particularly during the third week of September, which is ahead of the Chuseok harvest festival, seven companies plan to open subscriptions.

Millie Seojae, an e-book subscription service provider, will open a public subscription for two days starting Sept. 18, along with IMT, an equipment supplier, and SLS BIO. From Sept. 19 to 20, RevuCorporation and Hanssak will begin public subscription for their shares.

Doosan Robotics, the most-anticipated among the to-be-listed firms, will open a public subscription from Sept. 21 to 22, as well as Shinsung ST, a battery component manufacturer.

Analysts forecast that the upcoming IPOs will drive investor sentiment to rise in the second half.

“Doosan Robotics, a big shot with a market cap worth over 1 trillion won ($758 million), will come forward in the public offerings market this month following [Kosdaq-listed] Fadu,” said Choi Hyeon-joon, analyst at Shinhan Securities.

Choi expected that “the public offering market will pick up traction with a number of companies bracing for IPOs.”

Doosan Robotics is garnering the biggest attention.

Founded in 2015, Doosan Robotics has remained a leader in the domestic collaborative robot market since 2018 with 13 product line-ups for manufacturing, healthcare and services. A collaborative robot, or cobot, is an industrial robot designed to operate in collaboration with humans at production sites.

Doosan Robotics has the fourth largest share in the global market, excluding China, since 2021. A total of 16.2 million shares of Doosan Robotics will be open for subscription, with a price band set between 21,000 won and 26,000 won. The company expects to raise between 340.2 to 421.2 billion won, with a potential market cap ranging from 1.36 trillion won to 1.68 trillion won.

However, concerns remain about the higher-than-expected price band.

“The offering price expected by the analysts was around 1.2 trillion won,” said an institutional investor, but added that “the subscription is likely to generate strong interests from the investors since the robotics sector has high growth potential.”

Analysts are advising retail investors to take the business's growth potential and the adequacy of valuation into account when subscribing for public offering shares.

“The common thread among the IPO shares that gained strong interest this year was that the companies are in growth industries,” said Moonchase Asset Management CEO Choi Il-gu.

“The companies slated for IPOs are in robotics, EV batteries and platform businesses, which are attractive industries,” said Choi.

However, the market may be tougher for some companies than others due to high interest rates. For example, the share price of Fadu, which garnered interest as this year’s first IPO with a market cap of over 1 trillion won, fell 10.97 percent below the IPO price on the first day of trading in the Kosdaq market.

BY KIM YEON-JOO [shin.hanee@joongang.co.kr]