Major Korean companies share forecasts for IPO market in 2024

Major South Korean companies’ chief financial officers (CFOs) and financial executives forecast the country’s initial public offering (IPO) market in 2024 to be similar to or worse than that of 2023.

According to a survey conducted by Maeil Business Newspaper’s capital market tracker Radar M on Wednesday, 51.4 percent of CFOs and financial executives of 37 major Korean companies polled expected that the IPO market in 2024 would be similar to that of 2023, while 32.4 percent expected it to be worse and only 16.2 percent expected an improvement. The results suggest that 83.8 percent of the poll’s respondents believe that the IPO market will either remain the same or deteriorate.

There was a downturn in the performance of major companies whose valuation exceeds 1 trillion won ($772 million) in 2023, thanks to a market chill that has impacted the market since the year before. Companies including Hyundai Samho Heavy Industries Co., Kurly Inc., K Bank, and OASIS Corp., which had planned to go public with trillion-won valuations, successively withdrew their listing plans.

Seoul Guarantee Insurance Co., which was targeting the largest market capitalization in 2023, postponed its listing due to poor demand forecasts in October 2023 and Doosan Group’s robotics unit Doosan Robotics Inc., a robotics unit, was the sole large-cap company to successfully list in 2023 to date. KNS Co. and LS Materials Co. recently saw their stock prices quadruple from their IPO price to the upper price limit on the day of listing, but market observers suggest that the market needs the success of large-cap companies such as Doosan Robotics to reverse the overall mood.

In the meantime, 54.1 percent of respondents identified SK ecoplant Co., an engineering company under Korea’s SK Group, as the company to watch in the IPO market in 2024. SK ecoplant, formerly known as SK Engineering & Construction Co., is expanding its business into eco-friendly areas such as water treatment, waste management, and waste batteries. The market estimates SK ecoplant’s corporate value to be between 5 to 6 trillion won and is eagerly awaiting the company’s preliminary review for listing application.

LG Group’s information technology (IT) services unit LG CNS Co. also garnered significant interest, with 35.1 percent of respondents mentioning it as a potential candidate for listing in 2024. LG CNS currently trades on unlisted stock exchanges with an estimated market capitalization of more than 5 trillion won.

Other companies that caught respondents’ attention include CJ Olive Young Corp. (27 percent), Kakao Mobility Corp (27 percent), Kakao Entertainment Corp. (16.2 percent), and HD Hyundai Global Service Co. (10.8 percent).

The survey also revealed expectations for an improvement in the corporate bond market due to a potential decline in interest rates. 37.8 percent of respondents anticipated an increase in corporate bond issuance in 2024 compared to 2023, while 59.5 percent expected it to be similar. Only 2.7 percent predicted a decline compared to 2023.