In today’s briefing:
- Changes to a Points Based System for IPO Subscriptions in Korea
- Shinsung ST IPO Preview
- Shinsung ST IPO Valuation Analysis
Changes to a Points Based System for IPO Subscriptions in Korea
- In order to reduce fake subscriptions for IPOs in Korea, the financial regulators have changed the IPO subscription system to extend the number of subscription days from two to five.
- Plus, points based system is implemented so that investors will be given higher points for subscribing on the first day as opposed to the fifth day.
- Doosan Robotics will be a key company to look out for in terms of how this book building changes could impact its IPO as most upcoming IPOs are small caps.
Shinsung ST IPO Preview
- The IPO price range of Shinsung ST is from 22,000 won to 25,000 won and the expected IPO offering amount is from 44 billion won to 50 billion won.
- Shinsung ST produces busbars that connect currents of electric components in secondary battery batteries for EVs and ESSs, and module cases that protect battery cells from external shocks.
- The total order backlog of the company’s products reached 1.5 trillion won at the end of 2022. Order backlog ratio is 14x, which is very high.
Shinsung ST IPO Valuation Analysis
- Our base case valuation is implied price per share of 51,050 won, which is 104% higher than the high end of the IPO price range of 25,000 won.
- We estimate Shinsung ST to generate sales of 133.9 billion won (up 25.7% YoY) and operating profit of 15.4 billion won (up 94.6% YoY) in 2023.
- Our valuation sensitivity analysis suggests an IPO price range of 41,351 won to 61,771 won per share.