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IPOs

S. Korean COVID-19 test kit maker eyes listing next year

Nov 19, 2020 (Gmt+09:00)

SD Bio Sensor, Inc., a South Korea-based manufacturer of COVID-19 test kits, is pushing to go public early next year, drawing market attention as a stock on the rise owing to the global pandemic.

The company plans to file for preliminary screening to the Korea Exchange next month, according to the investment banking industry on Nov. 19. 

Founded in 2010, the company makes various types of real-time COVID-19 test kits that are exported globally. SD Bio Sensor's product portfolio includes rapid chromatographic immunoassay kits, reagents, as well as fluorescent immunoassay, which can measure COVID-19 antibodies from a small amount of blood. 

All of the COVID-19 detection kits provide results between 10 to 30 minutes, according to the company.

From the company's test kits, the Standard M nCoV Real-Time Detection kit was the country’s first COVID-19 reagent test kit to obtain approval from the Ministry of Food and Drug Safety. It has also received temporary Emergency Use Authorization amid the global pandemic crisis.


SD Bio Sensor's Standard M COVID-19 test kit


Last year, SD Bio Sensor posted 73.6 billion won ($66 million) in revenue with an operating profit of 890 million won ($800,000), but this year its earnings have surged on the back of the coronavirus.

The COVID-19 test kit maker is expected to post near 1 trillion won ($896 million) in revenue and an operating profit of around 700 billion won this year — almost 1,000 times higher than last year.

This puts the company on par with Seegene Inc., a diagnostic reagent maker and No. 2 on the country's junior bourse Kosdaq with a market cap of 5.46 trillion won. Seegene is expected to post 1 trillion won in revenue and an operating profit of 600 billion won this year.

Industry watchers predict SD Bio Sensor’s enterprise value to reach around 2 trillion to 3 trillion won considering Seegene's market cap. However, there are also concerns that the company's performance may not be as stellar next year due to the development of COVID-19 vaccines and medicines.

The company, however, expects to see increased demand for test kits as regular quarantine systems will likely still be put into place even with treatments approved for the coronavirus.

SD Bio Sensor says that it will become common practice to run COVID-19 tests in public areas such as airports or facilities with large gatherings of people, similar to managing the flu.

In addition to SD Bio Sensor, other diagnostics companies such as SolGent Co., and Osang Healthcare Co. are preparing to make trading debuts next year.

"Diagnostics companies are rushing to be listed given that COVID-19 vaccines are being developed sooner than expected," said an investment banking industry source. "It is uncertain if these companies will be able to receive high valuations next year in the IPO market," he said.

Write to Ye-jin Jun at ace@hankyung.com

Danbee Lee edited this article.

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