HD Hyundai Marine Solution stock price doubles on Kospi debut

HD Hyundai’s Vice Chairman Chung Kisun speaks on HD Hyundai Marine Solution’s data business at CES in January 2024 (Courtesy of HD Hyundai)

HD Hyundai Marine Solution Co.’s debut on the main Kospi, the largest initial public offering in South Korea since more than two years ago, nearly doubled the stock price on the first trading day.

The company, the vessel maintenance and aftermarket service unit of Korea’s top shipbuilding group HD Hyundai Co., saw the stock rise 96.5% to close at 163,900 won ($120.2) on Wednesday. 

Banking sources forecast that HD Hyundai Marine’s stock will continue to rise as some 92% of Korean institutional investors who participated in bookbuilding agreed that they wouldn’t sell the shares at least for 15 days from the first trading day. The investors expect the stock to be included in the Kospi 200 Index and benefit from influx of passive funds, sources said.

After listing, HD Hyundai’s ownership in the vessel maintenance unit dropped from 62% to 55.8%, while the second-largest shareholder KKR & Co.’s decreased from 38% to 24.2%.

HD Hyundai Marine’s market cap increased to 7.29 trillion won based on its closing price on Wednesday, the 53th-largest on the Kospi. The market cap was expected to be 3.71 trillion won based on the offer price, the biggest since LG Energy Solution Ltd.’s listing in January 2022.

Korea Exchange CEO Jeong Eun-bo (left), HD Hyundai Marine Solution CEO Lee Ki-dong celebrates HD Hyundai Marine’s Kosdaq debut on May 8 (Courtesy of KRX)

FURTHER RISE EXPECTED

Domestic institutional investors, which were inclined to sell shares on their first trading day, net bought 139.7 billion won worth of HD Hyundai Marine stock on Wednesday. Individual investors and foreigners net sold 80.5 billion won and 56.2 billion won worth of the shares, respectively.

The company’s market debut stands out as many local firms listed since April have seen lower rises in their stock price on the first trading day, compared with those that went public at the beginning of this year.

Mintech Co., an energy storage system inspection firm listed on the junior bourse Kosdaq last month, saw its stock rise 22.7% on the market debut day.

Battery manufacturing equipment maker Jeil M&S Co., biotech D&D Pharmatech Inc., and secondary battery maker Korchip Corp., which were listed on the Kosdaq earlier this month, respectively posted 22.7%, 10.6% and 58.1% increases in their stocks on their first trading day.

It compares with around 300% surge of Woojin Ntec Inc., a nuclear power plant equipment maintenance firm, and shipbuilding components maker Hyundai Hyms Co. which were listed on the Kosdaq in January.

Market insiders said that relatively expensive offer prices have restricted the jump in stock prices on the first trading day. Many firms that went public this year set up their offer prices 25-30% higher than the upper price band.

The offer prices have been increased as private equity firms and brokerages tend to raise the offer price to maximize existing shareholders’ interests and local institutional investors’ competition for subscriptions is heated for capital gain.

By Jeong-Cheol Bae

bjc@hankyung.com

Jihyun Kim edited this article.

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