Hyundai Oilbank, KDB Financial, Caffe Bene aim for listing on stock market this year


The IPO market in Korea is poised to attempt a recovery in 2012 with 70 companies led by Hyundai Oilbank waiting in the wings to go public following disappointing performances last year.

According to the Korea Exchange, the domestic initial public offering market saw 21 new entrants on KOSPI in 2011, down from 24 in 2010. The number of IPOs on the tech-packed KOSDAQ went down 24 percent on-year to 57.

For the new year, brokerages and investors hope momentum initiated late last year will bring positive change to the IPO market.

The catalyst was YG Entertainment, which made a debut on the KOSDAQ market on Nov. 23 with much fanfare, reflecting its standing as a leading entertainment firm that spearheaded the Korean pop music boom in Asia and elsewhere.

The most promising candidate this year is Hyundai Oilbank, a petroleum and refinery company established in 1991. The firm, specializing in oil products, is expected to fuel energy into the IPO market if it gets listed.

Hyundai Oilbank, 91.13 percent owned by Hyundai Heavy Industries, is estimated to be worth more than 3 trillion won in terms of balance sheet value. On top of that, the company posted revenue of 13.6 trillion won in the first nine months last year, up 144 percent from the same period a year earlier. 

Its IPO, to be managed by Woori Investment & Securities, will be worth some 2 trillion won, the biggest since May 2010 when the listing of Samsung Life Insurance raised 4.8 trillion won.

The state-run KDB Financial Group, which runs Korea Developing Bank, is also one of the hottest IPO possibilities this year. KDB reportedly set out to work on the IPO plan that involves a partial offering option due to its massive scale.

As part of preparatory steps for privatization, the financial group is in talks with HSBC to take over the foreign bank’s Seoul branch, and KDB chairman Kang Man-soo recently expressed positive views on the deal.

Companies in cosmetics and beverages also draw attention. The Face Shop, a unit of LG Household & Health Care, and CocaCola Korea are taking preparatory steps to list on the stock market this year. As both companies are regarded as frontrunners in their respective sectors, their IPOs are likely to go smoothly on the back of heightened investors’ attention.

Caffe Bene, a homegrown coffee house chain known for rapid growth, recently named Daewoo Securities as its lead manager and is seeking to get listed within this year.

The company, founded in 2008, is deemed a market leader with more than 700 stores nationwide, overtaking the U.S.-based rival Starbucks.

Conglomerate-affiliated firms such as CJ HelloVision, LG Siltron, LG Cable & System, Aekyung Chemical, Kolon Fashion Material are joining the IPO rush.

Foreign companies such as Australian fashion firm FFB and Japanese mortgage provider SBI Mortgage and Chinese industrial package firm China Green P&P are eyeing the listing on the Korean market this year.

Analysts said the IPO market’s actual growth in 2012 hinges on whether the local bourse stages a rebound. Investors remain jittery due to the ongoing eurozone debt problem, a factor that is expected to have a strong impact on the domestic IPO market.

By Yang Sung-jin (insight@heraldcorp.com)