A Surge of New Listings Begins This Month... Key Points for IPO Investors [Weekend Money]

Preliminary Review and Demand Forecasting for Companies Like Mushinsa

"Greater Scrutiny Needed in Selecting Quality IPOs"

Recently, the IPO market sentiment has been heating up again as newly listed stocks such as Skylabs succeeded in rebounding on their first day of trading. However, as October marks the peak season with a large influx of new IPOs, some experts emphasize the need for careful selection based on supply-demand dynamics and fair valuation from a longer-term perspective.

According to Samsung Securities, the IPO market in the first half of this year was marked by a concentration of investment in small and mid-sized stocks due to the lack of large-cap listings, resulting in strong short-term performance immediately after listing. However, in the second half, poor long-term performance and weakened investor sentiment toward KOSDAQ led to a decline in subscription competition ratios and a slump in stock prices.

In fact, Haechitech, which went public in August, was the first among small and mid-cap stocks this year to price its IPO at the lower end of its indicative range. Subsequently, Skylabs, which listed in September, also saw lackluster results, with both institutional demand forecasting and general subscription competition ratios falling short of the low end of the band.

However, Skylabs managed to rebound on its first trading day and maintained an upward trend, signaling a turnaround in market sentiment. Of the six companies newly listed in September—including Skylabs, Neosapience, Wiseplanetcompany, and Bigwaverobotics—all recorded closing prices above their IPO prices on the first day.

Despite this short-term rebound, analysts say a cautious approach is still warranted. Younghoon Kang, a researcher at Samsung Securities, stated, "The average rate of institutional lock-up commitments (lock-up) for September IPOs was only 5.9%, which is significantly lower than the first half average of 48.6%. The proportion of lock-ups for more than three months was also just 11.3%, compared to 48.9% in the first half." He added, "Given the substantial initial supply of shares, a conservative stance remains valid for long-term investors."

From October onwards, it is anticipated that the supply of IPOs will increase significantly both in quantity and quality. For October alone, 16 companies are scheduled to conduct demand forecasting, while another 39 companies—excluding SPACs—are currently undergoing preliminary KRX review. Mushinsa and Sonointernational are among the companies undergoing review for listing on the KOSPI, while major unicorns such as Megazonecloud, Rebellion, and Upstage are preparing their IPOs for late this year or early next year.

However, with so many IPOs concentrated in a short period, visibility for individual stocks may decline. Researcher Kang pointed out, "When multiple companies in similar sectors or a large number of stocks go public at the same time, investment funds inevitably become dispersed. As the initial 'scarcity premium' effect wanes, the attention given to each stock may diminish." He further added, "As a result, with a surge in IPOs after October, investors will need to be even more discerning regarding sector competitiveness and fair valuation."

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