Two SK Group arms unveil lower-than-expected IPO guidance

SK Shieldus Co. and One Store Co., two units of South Korea's SK Square Co., submitted their initial public offering applications on Thursday to raise up to 1.3 trillion won ($1.1 billion) in aggregate.

Their Kospi debuts, scheduled for May, will likely inject fresh momentum into the country's languid IPO market, which took a hit from a string of IPO cancellations due to tepid investor demand.

But their price bands are much lower than market expectations, which analysts said mirrored the lethargic stock market and deteriorating economic conditions.

SK Shieldus, the country's No. 2 security services provider, plans to price its shares between 31,000 won and 38,800 won apiece to raise between 840.2 billion won and 1.05 trillion won.

Based on the price band, its market capitalization will likely come in at 2.8 trillion to 3.5 trillion won, below the market estimate of around 4 trillion won. SK Square, a spin-off of SK Telecom Co., owns 63.1% of Shieldus. 

SK Shieldus, formerly known as ADT Caps Co., reported 121.9 billion won in operating profit on sales of 1.5 trillion won in 2021.

One Store, a homegrown app store, proposes a price band of 34,300 won and 41,700 won to raise a total of 228.4 billion won to 277.7 billion won. Its IPO valuation will put its market cap between 910 billion won and 1.1 trillion won, about half of the market estimate of 2 trillion won.

SK Square is its largest shareholder in One Store with a 48.41% stake. Its other shareholders include Naver Corp. with 25.45%, a consortium of SKS and Kiwoom Private Equity with 18%, KT Corp. with 3% and LG Uplus Corp. with 0.72%. 

Last year, the app store received a combined 16.8 billion won in funding from Microsoft Corp. and Deutsche Telekom Capital Partners (DTCP). Launched in 2016, One Store posted a 38% on-year growth in 2021 sales to 214.2 billion won.

Both companies are planning to hold bookbuilding this month.

FIRST IPOs FOR SK SQUARE'S UNITS

The two upcoming IPOs will be the first listings by units of SK Square. Last year, two other SK Group arms -- SK Bioscience Co. and SK IE Technology (SKIET), a rechargeable battery materials maker -- got listed on the main bourse.

SK Group, the country's third-largest business group, has been active in splitting off companies into separate ones and selling shares in the separated arms to PE firms, or listing them on the stock market.

Its other units, including e-commerce platform 11Street Co., GPS app T Map Mobility Corp. and battery supplier SK On Co., are preparing to go public as well.

Write to Ye-Jin Jun at ace@hankyung.com
Yeonhee Kim edited this article