Housing subscriptions for biotech and healthcare IPOs that could yield a windfall after the Chuseok holiday will continue. IPO investments allow investors to expect a decent side income with relatively small amounts of capital. On their first day of trading, newly listed stocks trade at prices ranging from 60% to 400% of their offering price. This means share prices can surge up to four times the offering price on the listing date, arithmetically presenting an opportunity for a 300% return.
This year, biotech companies have recorded relatively strong performance in the IPO market. While there are some differences from company to company, the stock price movements on their first day of trading were also not poor. This is why retail investors show significant interest in biotech IPOs.
In fact, Meju, a developer of inpatient management systems that listed this year, began trading at an opening price of 66,000 won on March 26, its first day of listing, which was more than three times its offering price of 21,600 won. Resens Medical, which develops medical devices incorporating cooling technology, also saw its opening price reach 37,600 won on March 31, significantly exceeding three times its offering price of 11,000 won.
Inventera, a new drug development company that listed in April; Remedy, a medical device company that listed in July; and Sky Labs, a healthcare company that listed this month, all provided profit opportunities for IPO investors on their first day of trading. Sky Labs is currently still trading at more than twice its offering price of 10,000 won.
However, IPO investments do not guarantee profits unconditionally. Depending on the investment sentiment in the IPO market and the broader stock market, IPO investors can also incur losses. Investors should check the demand forecasting results from institutional investors and carefully examine valuation, growth potential, and financial soundness before investing.
The first biotech or healthcare-related company to launch an IPO after the Chuseok holiday is Jincos Tech. Although it is a cosmetics manufacturing company, it possesses technical capabilities in hydrogel, a gel material that retains moisture. Its desired offering price range is 19,500 to 23,500 won. Hana Securities is serving as the lead underwriter. The company conducted demand forecasting until the 22nd and will accept housing subscriptions from the 2nd to the 6th of next month. It is attempting a transfer listing from KONECT to the KOSDAQ market. Based on its proprietary hydrogel formulation technology, recent performance has been growing. However, a weakness cited is its high dependence on a single product, as mask pack sales accounted for more than 90% of revenue last year.
The next company in line is MS Bio, a specialist in biomaterials. Its desired offering price range is 6,800 to 7,800 won. The offering price will be finalized after demand forecasting from the 28th to the 2nd of next month. Housing subscription days are scheduled for the 12th and 13th of next month. KB Securities is the lead underwriter. It is evaluated as having strengths in recent performance growth and relatively solid profit-generating capability. Based on the upper end of the desired offering price range, its corporate valuation is 217.4 billion won. After its KOSDAQ listing, it plans to build a new factory in Ochang, Chungcheongbuk-do, and actively enter overseas markets. The company added a growth driver by launching a skin booster this year.
Baro Farm has also finalized its IPO schedule. It is an integrated pharmacy platform company. Its desired offering price range is 16,400 to 20,200 won. The offering price will be determined through demand forecasting from the 22nd to the 28th of next month. Housing subscription days are scheduled for the 2nd and 3. Mirae Asset Securities is the lead underwriter. The company operates an integrated platform that allows pharmacies to compare inventory and prices of pharmaceuticals from multiple wholesalers at once and place orders. Its consolidated revenue for the first half of this year was 69 billion won, a 56.2% increase year-on-year, and its operating profit turned positive at 2.2 billion won. Based on the desired offering price range, its corporate valuation is between 201.3 billion and 247.9 billion won. Based on estimated performance from simply annualizing first-half results, the corporate valuation at the upper end of the band corresponds to a PER (price-to-earnings ratio) of 56.1 times.
New drug development company Nex Eye has passed the preliminary listing review by the Korea Exchange and is coordinating its IPO schedule and structure. As an anticancer drug developer, it received a corporate valuation of approximately 40 billion won in the over-the-counter market. It has licensed out its immunotherapy candidate (NXI-101) to ONO Pharmaceutical in Japan. The company holds platform technology called "ONCOKINE," which discovers proteins associated with resistance to immunotherapy in the tumor microenvironment.
Additionally, pharmaceutical and biotech, as well as healthcare-related companies such as Adel, Innovotherapeutics, Mothers Pharm, and Nova Cell Technology are undergoing preliminary listing reviews.
An investment industry official stated, "Investment demand in this year's IPO market has been relatively solid, but differentiation is also emerging, with some companies recently failing to attract strong interest." The official added, "When investing in IPOs, it is necessary to carefully examine the demand forecasting results conducted for institutional investors and check each company's differentiated investment points."
in THEBIO
