A number of closely watched initial public offerings will take place in South Korea this week, including that of contract drug manufacturer Samsung BioLogics and cosmetics company CLIO.
Samsung BioLogics, the biopharma contract manufacturing arm of Korean tech giant Samsung Group, will be listed on Korea’s main bourse Kospi on Thursday, marking the largest IPO of the year here.
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A sign is seen at the Samsung BioLogics headquarters in Songdo, Incheon. (Sohn Ji-young/The Korea Herald) |
On Wednesday, homegrown cosmetics maker CLIO, which drew much industry attention for securing a $50 million investment from global luxury giant LVMH Moet Hennessy Louis Vuitton in July, is set to go public on the secondary Kosdaq market.
Ahead of its IPO, Samsung BioLogics offered 25 percent of the company’s ownership, comprising of 11 million newly issued shares and 5.5 million existing shares owned by Samsung Electronics. Each share was priced at 136,000 won ($118.83), valuing the firm at around 9 trillion won.
Around 20 percent of the shares were offered for subscription by individual investors, while another 60 percent was offered to institutional investors and the remaining 20 percent to Samsung BioLogics employees.
For the portion of shares offered to individual investors, there were bids for 149,982,340 shares, which is 45.34 times higher than the allotted 3,308,261 shares, according to Korea Investment & Securities in charge of the deal.
The figure was lower than the high demand seen before the public listing of other Samsung affiliates, including Cheil Industries and Samsung SDS. The former was oversubscribed by 194.9 times, while the latter was oversubscribed by 135.19 times before their respective IPOs in 2014.
Meanwhile, the quota allotted to institutional investors was oversubscribed by 281 times on Oct. 28 when Samsung BioLogics finished taking orders from buyers.
For now, most analysts remain upbeat on Samsung BioLogics’ future prospects, noting that the biopharma contract manufacturing organization business is slated to grow on the back of rising global demand for biologic treatments and strong financial backing from Samsung Group.
“Considering the share value of its subsidiary, Samsung BioLogics’ market valuation stands at around 10.5 trillion won,” said Hyundai Securities analyst Kim Tae-hee in a report analyzing the firm’s prospects and future value.
Among other factors that could ensure the firm’s profitability, Kim pointed to the foreseen sales to be generated by the company’s first and second plants -- which have booked client orders to full capacity -- until 2022.
Nonetheless, some analysts have raised concerns about overvaluation, saying the current value of Samsung BioLogics, a company which has yet to generate profits, could be inflated.
Meanwhile, shares of CLIO were offered for sale at 41,000 won ahead of the IPO, valuing the firm at 737.5 billion won, according to NH Investment & Securities which is in charge of the deal.
The shares allotted to individual investors were oversubscribed by 5.68 times. The quota offered to institutional buyers was oversubscribed by 153 times, according to the brokerage.
CLIO owns three makeup brands mostly targeting women in their 20s and 30s -- CLIO, Peripera and Goodal. The brands are known for focusing on eye and lip makeup products such as eyeliners, eyeshadows and lipsticks.
CLIO plans to use the newly generated funds to target China, which has been contributing to its revenue hike. CLIO’s sales more than doubled from 42.5 billion won in 2014 to 107.1 billion won in 2015 after officially starting sales in China.
The firm’s sales have grown at a compound annual growth rate of 78.5 percent in revenue during the 2013 to 2015 period.
By Sohn Ji-young (
jys@heraldcorp.com)
