Doosan shares soar on scheduled IPO of Doosan Robotics

[Photo by Yonhap]

Shares of Doosan Corp. soared Monday on growing expectations for the initial public offering (IPO) of its subsidiary Doosan Robotics Inc. next month.

Shares of Doosan finished 27.65 percent higher at 149,100 won ($112.4) after gaining by the daily limit of 29.97 percent to reach 151,800 won.

The surge is seen as having come from the upcoming stock market debut by its subsidiary Doosan Robotics.

Doosan Robotics kicked off its five-day book building session on Monday. The desired offering price ranges from 21,000 won to 26,000 won for a market capitalization of between 1.36 trillion won and 1.69 trillion won.

Doosan Robotics plans to be listed next month after receiving public subscriptions on September 21 and 22.

Observers noted that the higher the offering price, the more value will be given to its largest shareholder Doosan.

Doosan will hold a 62.8 percent stake in Doosan Robotics after 16.2 million new shares are issued in the IPO.

Industry insiders project the value of Doosan Robotics could approach 2 trillion won.

Meritz Securities Co. estimated in a report that Doosan Robotics could reach a market capitalization of 1.9 trillion won by 2026, with earnings per share (EPS) growing to 427 won after the company turns profitable after the IPO.

As a fair price, the brokerage house suggested 29,000 won, which is higher than the upper end of the offering price range.

Furthermore, as robotics has emerged as a dominant theme in the stock market, related stocks have also risen sharply.

The attractive valuation (stock price-to-earnings ratio) of Doosan Robotics is expected to attract buying interest.

According to DB Financial Investment Co., as of September 7, Rainbow Robotics Inc. and Neuromeka, which Doosan Robotics selected as comparable companies in its securities filing, have an estimated price-to-sales ratio (PSR) of 264 times and 57 times, respectively, for this year.

Doosan Robotics, on the other hand, has set an offering price range of 29 to 36 times PSR.