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Busy IPO pipeline expected in 2024

E-commerce firms may return to seek better valuations

By Im Eun-byel

Published : Jan. 8, 2024 - 16:16

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Hopes are high for the initial public offering market this year, backed by big-name deals and bullish market expectations.

Though the local IPO market remained sluggish in early 2023 due to deteriorating investor sentiment, it slowly phased out of the slump later in the year as major deals took place, such as those involving energy storage device manufacturer LS Materials and resource recycling company DS Dansuk.

Reflecting growing hopes for a turnaround of major economies’ monetary policy, market watchers expect more deals with raised bets to happen this year.

A report from Eugene Investment & Securities released Monday showed that the firm projects 140-150 companies to make a stock market debut this year, raising some 8 trillion to 10.5 trillion won ($6 billion to $8 billion).

“The head count was not bad last year. But the total amount was low due to the slow economy,” said Lee Hyo-seob, senior research fellow at the Korea Capital Market Institute, referring to the 147 companies that debuted on the market in 2023, garnering a total of 4.1 trillion won.

“The IPO market was pressured by high rates and funding costs last year. But with the fall of the market interest rates shown from end-2023, the preference for risk assets has strengthened, raising hopes for IPO deals,” he said.

Tech giants such as Viva Republica, the operator of financial technology app Toss, have rolled out IPO plans, while keen attention is being paid to retail giants such as CJ Olive Young and SSG.com, whose high-profile market debuts have been delayed largely due to pandemic disruptions.

Kurly

Kurly is likely to go for an IPO soon, backed by improved revenues.

After receiving preliminary approval in August 2022, the fresh food delivery operator called off its plan in January 2023, as it deemed it would not be able to receive full valuation amid weakening investor appetite. The valuation for the company, which had hit 4 trillion won, dropped to 2 trillion won last year.

But last month, Kurly posted its first-ever monthly profit in terms of earnings before interest, tax, depreciation and amortization since the firm was launched in 2015, backed by the launch of Beauty Kurly and lowered expenses.

The improved earnings could give Kurly the green light for an IPO. The firm has been putting forward a stance that it plans to go public at the right timing.

The Pinkfong Co.

The Pinkfong Co. is aiming for an IPO within the year. Founded in 2010, the content company has reached unicorn status, valued at more than 1 trillion won.

With its eponymous “Pinkfong” and “Baby Shark” series, the company has become a staple in the global educational entertainment scene.

The company is reportedly set to apply for preliminary approval for its IPO in the first half of the year at the earliest. The content startup posted revenue of 51.2 billion won and an operating profit of 3.2 billion won in the third quarter.

CJ Olive Young

Health and beauty store chain Olive Young is likely to try for an IPO once again in 2024, as it recently brushed off the risk of discipline from the nation’s top antitrust watchdog with a reduced fine.

As a leading beauty store chain here, the company is valued to be worth between 4 trillion and 5 trillion won. The brand is expected to further grow as its yearly revenue is assumed to have reached 3 trillion won last year, marking a nearly 1 trillion won rise from that of 2020.

The brand had tried to make its market debut in 2022, but withdrew due to the sluggish market sentiment.

SSG.com

SSG.com, the digital shopping platform of retail giant Shinsegae, may go for an IPO once again this year as well. The company seems to have been waiting for the right time for a stock market debut.

The firm logged revenue of 429.5 billion won in the third quarter, while its operating loss stood at 30.7 billion won. If SSG.com makes its market debut successfully, more e-commerce companies that have been eyeing an IPO could follow suit.

Viva Republica

Viva Republica, operator of fintech app Toss, has kicked off procedures for an IPO, having sent a request for proposal to major securities companies in December. But the timing has not been determined yet, the firm said.

Founded in 2013, Viva Republica has expanded its business through the Toss app, covering banking, insurance, securities, payments and more. Evaluated at around 9 trillion won during the last pre-IPO investment round in 2022, Toss further aims to reach "decacorn" status, with a corporate valuation of over $10 billion.

Viva Republica has been showing fast growth, with its assets increasing from 2.7 trillion won in the third quarter of 2022 to 3.38 trillion won on-year.