2024-03-31 12:18:48
A view of the dealing room at Hana Bank’s main branch in Jung-gu, Seoul. [출처 : 연합뉴스]
Public offering stocks have appeared that will inject tension into the relaxed IPO (initial public offering) market. HD Hyundai Marine Solutions, which is evaluated as a valuable company of HD Hyundai Group, has launched a full-fledged IPO. Although it receives good scores in terms of growth, profitability, and high dividend payout ratio, the controversy over overvaluation of the public offering and the high proportion of existing stock sales are evaluated as obstacles that must be overcome.
According to the Financial Supervisory Service’s Electronic Disclosure System on the 29th, HD Hyundai Marine Solutions submitted a securities report on the 25th and began preparations for an IPO in earnest.
The general public offering subscription for general investors will be held from the 25th to the 26th of next month through the lead underwriter KB Securities, co-underwriters Shinhan Investment & Securities, Hana Securities, and underwriters Daishin Securities and Samsung Securities.
HD Hyundai Marine Solution is a ship A/S specialist company of HD Hyundai Group that maintains, repairs, and repairs ships. What attracts the market’s attention is the size of the public offering. HD Hyundai Marine Solutions is offering 8.9 million shares through this listing. The public offering price ranges from 73,300 won to 83,400 won. Based on the public offering price, the total expected public offering amount is KRW 652.4 billion to KRW 742.3 billion.
It is the largest IPO company since LG Energy Solution, which was listed in January 2022. Even compared to previous large-scale IPOs such as WCP (KRW 432 billion), Doosan Robotics (KRW 421.2 billion), and EcoPromity (KRW 419.2 billion), the difference in weight class is clear.
The expected market capitalization based on the top of the public offering price is 3.7071 trillion won. It is currently ranked 90th in KOSPI market cap. If the public offering price at this level doubles after listing, it will enter the top 50 in KOSPI market cap and be worth aiming for early inclusion in the KOSPI 200.
The company’s stability is also good. The shipbuilding industry is a representative cyclical industry, but like automobiles, ship A/S has the characteristic of being less cyclical. This is because, as long as the operation is not stopped, maintenance and repair demands will continue to occur as the vehicle deteriorates. In addition, there is no need to worry about losing work because the business base itself is based on ships manufactured by HD Hyundai or equipped with engines or equipment made by HD Hyundai.
In fact, sales are showing stable growth, reaching KRW 1.0877 trillion in 2021, KRW 1.3338 trillion in 2022, and KRW 1.4304 trillion last year. Operating profit is also steadily increasing, reaching 113 billion won in 2021, 142 billion won in 2022, and 201.5 billion won last year. Last year’s operating profit margin was 14.1%. Considering that the average operating profit rate of the Korean manufacturing industry is around 5%, this is a fairly high number.
The dividend is especially attractive. The company’s dividend payout ratio was 122.82%, 76.24%, and 66.17%, respectively, over the three years from 2021 to last year. Dividend payout ratio refers to the proportion of dividends out of the net profit earned that year. A dividend payout ratio exceeding 100% means that more money was distributed to shareholders than the net profit for the year.
HD Hyundai Marine Solutions stated in its securities report, “The basic principle is to pay dividends at the level of 50% to 70% of the net profit in separate financial statements for three years from the year of new listing on the stock market.”
Last year, when the dividend payout ratio was 66%, the dividend was 2,500 won per share. Even if this year’s dividend is this much, the dividend yield based on the public offering price is 3.00-3.27%. Among public offering stocks, it is very rare to find a company that pays this level of dividends. Including LG Energy Solution, WCP, Doosan Robotics, and EcoPromerty all decided to pay no dividend last year.
Chevron’s LNG carrier Asia Energy signed a ‘low-carbon vessel conversion contract’ with HD Hyundai Marine Solutions last February. [제공 : HD현대]
However, there are many factors that put pressure on the success of HD Hyundai Marine Solutions’ IPO. First, there are criticisms that the public offering price is too high. The price-to-earnings ratio (PER) at the upper end of the company’s public offering price is 24.5 times. Considering that NAVER is 31.21 times, it may be criticized as being excessively overvalued.
The biggest problem is sales of old stocks. Of the 8.9 million shares offered in this IPO, 4.45 million shares, or half, are old stock sales. All of the sales from old stocks are shares held by private equity fund KKR, the second largest shareholder. KKR owns 15.2 million shares of this company, some of which will be cashed out through this IPO.
In general, if the proportion of sales from the old stock market exceeds 30%, it is considered too high, but 50% is sales from the old stock market. Looking at the IPO market over the past two years, LS Materials and Hyundai Hims, which had 40% of sales from old stocks, had successful IPOs. However, both SK Shielders and One Store, which accounted for 46% and 50% of sales in Europe, respectively, were unable to overcome the threshold of demand forecasting for institutional investors and withdrew their listings. Seoul Guarantee Insurance, which promoted an IPO last year with a structure of 100% of old stock sales, also failed to complete the IPO.
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