Seungchang Yoo, Head of ECM at KB Securities: "Stable IPO Market Expected to Continue Next Year"

KB Securities Poised to Remain No. 1 in IPO Underwriting for Second Consecutive Year
Company-Wide Support and Stable Workforce Are Keys to Success
Aiming to Maintain Top Position Next Year

"This year's initial public offering (IPO) market performed well, and I expect this stable trend to continue into next year."

Seungchang Yoo, Head of ECM Division at KB Securities

Seungchang Yoo, Head of ECM Division at KB Securities (Executive Director), shared this outlook for next year's IPO market in an interview with The Asia Business Daily on November 17. He said, "There are many new policies supporting companies, and with this kind of policy backing, IPOs will be an important tool to ensure smooth capital flow. Companies are also motivated to grow through IPOs, and since there likely won't be major regulatory changes next year, I expect the IPO market to become more active." He added, "A healthy market means that good companies are being properly valued. It also means the market is not overheated, and companies are able to receive fair valuations."

He assessed that this year's market was favorable. Yoo said, "To be honest, the market sentiment was not very positive at the beginning of the year. There were concerns due to political instability and IPO system reforms, but the market rebounded faster than expected, and the regulatory changes were well absorbed. What I find particularly positive is that, despite the healthy market, there was no overheating. When I first joined the ECM Division two years ago, it was considered normal for IPO prices to be set 20-30% above the upper end of the price range during the market boom in the second half of the year. The biggest attraction of IPOs as a financial product is the discount. Investors buy IPO shares because they are offered at a 20-30% discount to fair value, but when prices exceed that range, the appeal of IPOs diminishes. As expected, the IPO market performed poorly the following year. This year, IPO prices were not set excessively high, and there was no sign of overheating."

Amid this favorable market environment, KB Securities is on track to maintain its position as the top IPO underwriter for the second consecutive year. According to the Korea Exchange, KB Securities recorded a total public offering amount of 2.0245 trillion won this year, the highest among domestic securities firms. KB Securities previously ranked first in IPO underwriting in both 2022 and 2024. This year, KB Securities successfully listed major IPOs such as LG CNS, Daehan Shipbuilding, and Myungin Pharmaceutical.

Regarding KB Securities' outstanding performance-ranking first in the IPO market three times in the past four years-Yoo cited company-wide support and a stable workforce as key factors. He explained, "Company-wide support is the biggest reason for our success. The Debt Capital Markets (DCM) division has extensive networking with companies, which helps us source deals, and the Wealth Management (WM) division connects us quickly with regional companies planning IPOs through private bankers and regional heads. If there was no interest or collaboration, there would be no reason to do this, but other departments are also proactively supporting us. In addition, the sales division provides significant help with institutional demand forecasting and marketing. This organic, company-wide collaboration has led to strong results."

A stable workforce is also considered one of KB Securities' strengths. Yoo said, "Manpower is the most important factor in IPOs. When the organization is stable, good results naturally follow. IPOs are a long-duration business where trust is paramount, and there has been almost no turnover in the past two to three years. We have maintained a strong track record for three to four years, and our team has remained intact. The number of team members has grown from around 40 three years ago to 48 now. Over the past three to four years, we have closed many good deals, and with the addition of new hires, our workforce stability has been further strengthened."

For Yoo, trust is the most important element in carrying out IPO work. He said, "Trust with the issuing company is the most crucial factor. Many of these companies are family-run or unlisted, and as they go through the verification process by the exchange, the Financial Supervisory Service, and market investors to become listed companies, there are inevitably areas that need improvement or supplementation. If trust is not established between the issuer and the underwriter, it can lead to uncomfortable situations." He continued, "Ultimately, the IPO must succeed, and this requires an equity story and valuation that meet market expectations. Since we need to convince the market, it is essential to have team members who have built trust with the company over a long period of collaboration."

Yoo's goal is to maintain the top position next year as well. He said, "Being number one is my biggest goal, and beyond that, my mid- to long-term objective is to become a partner for sustainable growth for the companies we take public. I want to help create conditions for companies to grow alongside us after listing. If a company we take public is listed at 100 to 200 billion won and grows to 1 trillion won in five to ten years, we can continue to help them with capital raising and mergers and acquisitions (M&A), becoming a true partner for growth as the ECM Division."

This content was produced with the assistance of AI translation services.