More Korean IPOs being canceled as reality catches up with hype

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More Korean IPOs being canceled as reality catches up with hype

Published: 25 Jan. 2023, 17:23

Hologram of IPO glowing icon, sunset panoramic city view of Singapore [SHUTTERSTOCK]

More IPOs are being shelved as the market remains weak and listing aspirants get a heavy dose of reality, with some valuations down 75 percent.

Kurly called off its plan to go public earlier this month, while internet-only Kbank and Golfzon County, a golf course operator, did not submit required documentation by the deadline.

Companies that passed the preliminary examination have to complete the IPO process within six months. Golfzon County, which passed the examination on Aug. 22, had to submit the securities report by Jan. 18, but didn’t. The deadline for Kbank, 33.72 percent held by BC Card, was Jan. 6.

11st temporarily halted its plans to submit an application for the preliminary examination, according to local press reports.

“The change in the schedule of the IPO hasn’t been confirmed,” said a spokesperson for the e-commerce company. "We’re reviewing the timing of going public considering the market situation.”

With equity prices down, stock sales would command lower prices, meaning companies listing would raise less money or would have to sell more stock.

Kurly, which was valued at around 4 trillion won ($3.2 billion) at its peak, is now valued at around 1 trillion won.

The Kospi is up 9 percent from the beginning of the year, but is still down 11 percent on year.

Thirteen companies withdrew the IPO plans last year, a record high. They included Hyundai Engineering and SK shieldus. The companies cited valuation problems.

“The stock market was sluggish due to various external variables,” said Park Jong-sun, a researcher at Eugene Investment & Securities. “As uncertainties expanded, companies that were pushing for IPOs decided to withdraw plans to adjust the timing. Since concerning variables remain, similar phenomenon is expected to repeat this year.”

Kakao Entertainment, Kakao Mobility, SK ecoplant, LG CNS, CJ OliveYoung and SSG.com have considered listing this year.

Some companies are pushing ahead as planned. Oasis, a dawn delivery e-commerce operator, is scheduled to begin the two-day subscription starting on Feb. 14. It is set to list as a Kosdaq company in February.

“Receiving a good corporate valuation after waiting for the market recovery is also good, but I believe it is more important to receive fair valuation and improve corporate image by upgrading shareholder value,” said Oasis CEO An Jun-hyeong in an interview with Chosun Biz published Wednesday.

BY KIM YEON-JOO, JIN MIN-JI [jin.minji@joongang.co.kr]