LS Materials’ share price quadruples on Kosdaq debut

The share price of LS Materials Co., a South Korean energy storage device maker, quadrupled on its Kosdaq market debut Wednesday given its rosy earnings outlook, with investors flocking to the newly listed shares amid the rangebound broader market.

LS Materials finished at 24,000 won ($18.3), a whopping 300% surge from its public offering price of 6,000 won. The percentage change was the maximum allowed fluctuation for a stock on its first trading day.

By comparison, the junior Kosdaq market ended little changed at 839.53.

It opened at 19,440 won, up 224% from the IPO price and went limit up about two hours later. Its market capitalization reached 1.6 trillion won as of Wednesday’s close.

With its triumphant market debut, it became the second company to see its share price rise four-fold on its first trading day. The first to do so was KNS Co., a special-purpose machinery manufacturer, after regulators expanded the daily fluctuation band for an IPO stock in June this year.

LS Materials is the world’s No. 1 player in the market of large-size ultracapacitors, which stabilize power supply and are used to replace and supplement primary batteries and lithium-ion batteries.

The company is also beefing up the aluminum alloy business. 

In bookbuilding earlier this month, it was oversubscribed 3,968 times, attracting 2,025 institutional investors.

From individual investors, it drew 12.7 trillion won in subscription deposits, marking an oversubscription ratio of 1,164 times.

LS Materials’ stellar stock market debut may restore investor confidence in IPOs following last month's “Fadu case."

Fadu, the first unicorn in South Korea’s semiconductor sector, in November shocked investors with poor results three months after its stock market debut. The results were in stark contrast to its earlier projections.

Addressing such concerns, EcoPro Materials Co. and LS Materials disclosed their latest monthly results for bookbuilding to ensure fair assessments of their valuations.

The share price of EcoPro Materials soared by 200% on its Kospi debut last month, compared to its public offering price of 36,200 won.

“Liquid money shifted to the primary market this year, with investors disappointed with poor returns from the secondary market,” said Yoo Seung-chang, managing director and head of the IPO division at KB Securities.

“If rangebound trade continues into next year, money inflows into the IPO market will accelerate.”

Write to Jeong-Cheol Bae at bjc@hankyung.com
 


Yeonhee Kim edited this article.