HD Hyundai Marine Solution Jumps in Seoul Debut

HD Hyundai Marine shares closed up 97% versus their initial public offering (IPO) price in the company's trading debut on Wednesday, after a 742 billion won ($538 million) IPO, South Korea's largest in two years.

The successful listing of the ship maintenance and repair firm, backed by U.S. private equity giant KKR, paves the way for other potential offerings to come to market. Sizeable South Korean IPOs had dried up during much of 2023 on uncertain market conditions.

HD Hyundai Marine Solution shares opened at 119,900 won and closed at 163,900 won, up sharply from their issue price of 83,400 won which was at the top of its targeted valuation range. As of Wednesday's close, its market valuation was about 7.3 trillion won.

Analysts said only about 10% of all shares being available to trade on Wednesday helped to keep the price up.

Parent HD Hyundai, a South Korean conglomerate involved in heavy industry and energy, remains the largest shareholder with 56%, while No.2 shareholder KKR's 24% stake was on a six-month lock-up.

The deal was the largest South Korean IPO since battery maker LG Energy Solution raised $10.72 billion in 2022, according to Dealogic data.

Samsung Securities analyst Han Young-soo said HD Hyundai Marine Solution was a rare stock that would immediately benefit from stronger environmental regulations on ships.

"Emerging regulations on greenhouse gas emissions and stronger standards over time are raising the prices of (ship renovation) projects," he said. "Demand for LNG carrier renovation is also on the rise."

The company reported a 201 billion won operating profit in 2023, up from 142 billion won the previous year. Its revenue grew from 1.33 trillion won in 2022 to 1.43 trillion won in 2023.

South Korea had no listings during the first half of 2023 on the main KOSPI market, and only four listings in the second half.

However, the four included successful listings by firms with attractive long-term industry outlooks such as robot manufacturer Doosan Robotics 454910.KS and battery materials maker Ecopro Materials 450080.KS, encouraging companies with similar outlooks to consider coming to market, analysts said.

South Korean firms considering IPOs include Viva Republica, operator of mobile financial platform Toss, artificial intelligence semiconductor startup FuriosaAI, and online bank KBank, according to analysts.

($1 = 1,362.7600 won)

(Reuters - Reporting by Joyce Lee; Editing by Sonali Paul and Jamie Freed)