[Edaily Reporter Shin Ha-yeon ] Attention is focused on whether major players will enter the initial public offering (IPO) market toward the end of the year. While SFC, a company specializing in organic light-emitting diode (OLED) materials, has filed a securities registration statement and is proceeding with its public offering, uncertainty remains regarding the listing schedules of Musinsa and Sono International due to prolonged review processes resulting from tax audits. With this year’s IPOs primarily centered on small and medium-sized enterprises, all eyes are on whether the listings of large companies will breathe new life into the market.

According to the financial investment industry on the 22nd, SFC passed the preliminary screening for a KOSPI listing on the 15th and submitted its securities registration statement on the 19th. The company is offering a total of 5 million shares at a target price range of 31,600 to 36,100 won per share; based on the upper end of the price range, the expected market capitalization is 731.3 billion won. Barring any requests for corrections, the registration statement will take effect on November 10. The company plans to list on the KOSPI after conducting institutional bookbuilding from the 9th to the 13th of the same month and a public subscription from the 18th to the 19th.

The IPO valuation falls short of the 1 trillion won initially discussed in the market. The company calculated a per-share valuation of 46,210 won by applying an EV/EBITDA multiple of 13.39—based on the average of eight comparable companies—and then applied a discount of 21.88% to 31.62%. SFC, which specializes in blue OLED emitting materials, plans to use the proceeds from the offering to expand production facilities and other initiatives. Since the company’s valuation reflects recent improvements in performance, whether the upward trend in profits continues will be a key point of interest during the offering process.

Market attention is also focused on the listing of Musinsa, a Fashion Platform Co.,Ltd. that was considered this year’s biggest IPO candidate. Musinsa filed for a preliminary listing review with the KOSPI on September 7, and market estimates have placed its enterprise value between 8 trillion and 10 trillion won. However, as the company is currently under an unscheduled special tax audit by the National Tax Service, expectations are growing that its listing will be delayed until next year.

Sono International, a hotel and resort operator that filed for a preliminary review in June of this year—marking its third attempt at an IPO following attempts in 2019 and last year—had initially been expected to list within the year, but its schedule has become uncertain after it was selected for a special tax audit. Considering the remaining IPO schedule for the year, SFC could become the second and final company to list on the KOSPI this year, following Kbank.

Whether these large-scale public offerings come to fruition is expected to influence the overall sentiment in the IPO market. According to the Korea Exchange, including MS Bio, which listed today, there have been 37 new public offerings this year (excluding SPACs), raising a total of 1.9176 trillion won. Of these, only three companies—#Kbank (498 billion won), #CHAEVI CO., LTD (111 billion won), and #Ellis Group (201 billion won)—raised more than 100 billion won. While the number of companies listed in the second half of the year reached 20, surpassing the 17 listed in the first half, the total offering amount was 784.8 billion won, falling short of the first half’s 1.1328 trillion won.

Another point of interest is whether investor sentiment, which has cooled due to sluggish stock prices following IPOs, can be revived. Of the 36 companies listed on KOSDAQ this year, 31—or 86.1 percent—were trading below their initial public offering (IPO) price as of the closing price on the 21st. While the average return from the IPO price to the closing price on the first day of trading was 93.65 percent, the average return relative to the previous day’s closing price stood at minus (-) 33.44 percent.

Even Ellis Group, which recently went public with a valuation in the trillions of won, failed to translate the initial public offering market’s expectations into a rise in its stock price. Ellis Group, which entered the stock market with a market capitalization of approximately 1.0054 trillion won based on its offering price, raised 10.2599 trillion won in subscription deposits during the public offering. However, on the 20th—its first day of trading—the stock closed 32.04% below the offering price, and even after hitting the daily price limit the following day, it still closed 11.71% below the offering price.

There is a growing list of candidates set to proceed with IPOs through the end of the year. According to the stock exchange, 28 companies are currently awaiting preliminary review results, while 37 companies have received approval and are either proceeding with or preparing for follow-up procedures such as the public offering. Gudai Global, a beauty company rumored to be valued at around 10 trillion won, is also reportedly preparing to file for a preliminary review for a KOSPI listing this November.

Park Jong-seon, an analyst at EUGENE INVESTMENT & SECURITIES, explained, “The third-quarter IPO market was sluggish, with no major IPOs and significant year-over-year declines in the number of listed companies and total offering amounts; however, we expect a recovery in the fourth quarter.” He added, “As of the end of September, companies that have filed for preliminary review include medium- to large-cap firms such as Ace Engineering, Musinsa, Sono International, and Beomhan Mecatech.” He further projected, “The estimated market capitalization of the IPO market in October is expected to range from 2.2 trillion to 2.7 trillion won, which is higher than the historical average market capitalization of 1.6 trillion won for listings in that month.”