(Bloomberg) — SK IE Know-how Co., the battery supplies unit of South Korean power provider SK Innovation Co., doubled in its Seoul debut Monday earlier than paring about half of these early good points amid a broad selloff in Asian equities.
SK IE’s inventory opened at 210,000 received ($188), in contrast with its providing value of 105,000 received, which was already on the prime of its marketed vary. It traded at 159,500 received as of 11:21 a.m. in Seoul, nonetheless 52% greater than the IPO value. South Korea’s benchmark fairness index was down 1.6%.
SK IE Know-how’s $2 billion IPO was the nation’s greatest since cellular game-maker Netmarble Corp. raised $2.4 billion in 2017, in accordance with knowledge compiled by Bloomberg. The maker of battery separators attracted file ranges of curiosity from each retail and institutional buyers, underscoring continued starvation for first-time share gross sales in South Korea whilst urge for food abates elsewhere.
The corporate, which counts Panasonic Corp. and Samsung SDI Co. amongst its shoppers, plans to make use of the IPO proceeds to broaden capability at its Poland plant that may begin manufacturing for European automakers later within the 12 months.
Whereas the near-term development will stay within the EV battery separator enterprise that may account for 80% of its revenues within the subsequent three years, the corporate additionally plans to develop supplies for solid-state batteries and broaden manufacturing of polyimide movies that go on versatile shows, Chief Govt Officer Rho Jae-sok stated in April.
Hyunsoo Kim, an analyst at Hana Monetary Funding Co., has a goal value at 148,000 received for SK IE’s inventory. The worth premium might be barely greater than the common of different battery supplies suppliers provided that the separators enterprise requires heavy capital expenditure, in accordance with Kim.
Institutional buyers put in orders for a file 1,883 instances the shares supplied by SK IE Know-how, beating different scorching Korean IPOs previously 12 months when it comes to demand, such because the 962.6 billion received itemizing of Okay-pop superstars BTS’s company Massive Hit Leisure Co., which was greater than 1,000 oversubscribed by institutional buyers.
Mother-and-pop consumers additionally poured into SK IE Know-how’s IPO, with 80.5 trillion received in bids for shares, in accordance with IPO supervisor Mirae Asset Securities Co. That beat the earlier file set in March by SK Bioscience Co., which drew 63.6 trillion received in retail bids.
The extent of demand exhibits that the retail buying and selling mania that turned a characteristic of 2020 and led to a number of blowout IPOs remains to be robust this 12 months. Analysts anticipate that enthusiasm to proceed this 12 months given South Korea’s unfastened financial coverage.
A number of corporations are queuing as much as checklist to make the most of the share sale growth and investor demand, resulting in expectations of a file 12 months for IPOs. Hopefuls embody hit sport developer Krafton Inc., LG Chem Ltd.’s battery enterprise and KakaoBank Corp., Korea’s greatest mobile-only financial institution.
SK IE Know-how can be anticipated to profit from rising demand for electrical autos. SK Innovation, the power and chemical compounds unit of South Korea’s third-largest conglomerate, SK Group, was a relative latecomer to the electric-car battery trade, embracing the expertise solely as a part of a diversification push. It started growing lithium-ion batteries for hybrid electrical autos in 2005 and spun off the unit in April 2019. Battery separators enhance the output and stability of batteries.
SK IE Know-how’s IPO was managed by Mirae Asset and JPMorgan Chase & Co., assisted by Korea Funding & Securities Co. and Credit score Suisse Group AG.
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