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Korean IPOs in February defy coronavirus fears

A night view of Yeouido, Seoul (Herald DB)
A night view of Yeouido, Seoul (Herald DB)
The initial public offerings of South Korean firms in February were largely successful, despite the impact of the new coronavirus on the domestic stock market.

This month through Friday, five companies -- Sunam, Lemon, Kencoa Aerospace, JNTC, Seoul Viosys -- wrapped up IPOs, raising a combined 192.1 billion won ($158.1 million). Four out of five, except for Kencoa Aerospace, were more than successful.

The offered prices of the four companies were set at, or beyond, the upper cap of the price band suggested in the listing procedure on the Korea Exchange’s development board Kosdaq.

This was in contrast to the Kosdaq benchmark index, which dipped 11.3 percent in two weeks, as the coronavirus spread across the nation.

The four were all dedicated to the industry of components, materials and manufacturing equipment.

Their solid debuts were buoyed by the export-driven nation’s pan-governmental effort to stimulate the industry, coupled with a bullish trend of semiconductors and electronic devices across the global market, analysts said.

Choi Jong kyung, head analyst at Heungkuk Securities, said the uptrend was visible since October, when the SME Ministry’s selection of 100 companies boosted market optimism for the industry. That was the latest move as part of the Moon Jae-in administration’s support for the industry to achieve independence in the supply chain as a trade feud with Japan escalated.

“The IPO results stem from a combination of the firms’ earnings, government support and market sentiment favorable to the industry,” Choi told The Korea Herald

Those already listed in February were trading higher than the offered price as of Friday.

Sunam, a coated superconductor cable maker, closed at 3,870 won, 24.8 percent higher than the offering price of 3,100 won since it began trading Feb. 20. Lemon, an electromagnetic interference shield maker for electronic devices like Samsung smartphones, approached the price ceiling in its Kosdaq debut Friday.

JNTC, a producer of tempered glass for smartphone screens, and Seoul Viosys, a maker of tempered glass for smartphone screens, both completed IPOs this week and are set for Kosdaq listing in early March.

Meanwhile, Playd, a marketing subsidiary of telecom giant KT, is gearing up for the retail investor tranche in March after its offered price was fixed at 8,500 won, beyond the price band upper cap at 7,700 won.

Not all firms were able to dodge the coronavirus impact on the market.

Kencoa Aerospace, an aircraft part maker, set its offered price at 10,000 won, breaching the lower end of the price band at 13,000 won. NFC, a cosmetics materials maker, canceled its February IPO plan.

By Son Ji-hyoung (consnow@heraldcorp.com)
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