South Korean IPO Boom Continues As Vaccine Company SK Bioscience Shares Up 30% On Debut

SEOUL (Reuters) – Shares in South Korean company SK Bioscience Co Ltd were up 30% on first day of trading Thursday as investor bets on the COVID-19 vaccine developer and manufacturer’s outlook turned it into a business from nearly 12 billion dollars.

The stock opened on Seoul’s KOSPI market at 130,000 won per share, double the initial public offering (IPO) price of 65,000 won, then quickly jumped to 169,000 won at the start of trading, valuing the company at 12.9. trillion won ($ 11.5 billion).

The 30% increase, after the largest IPO in Seoul in nearly four years, was KOSPI’s best opening day performance since global electric vehicle component supplier Myoung Shin Industry listed in December.

Analysts said the successful listing continues the trend of a fast-paced IPO market in South Korea this year. Strong investor demand is expected to fuel more company listings in sectors seen to be profitable from increased health concerns and housekeeping habits driven by the COVID-19 pandemic.

Vaccine developer, in which SK Chemical holds a 68.4% stake, has raised 1.5 trillion won in the country’s largest IPO since mobile game developer Netmarble raised 2.7 trillion won. in May 2017, according to Korea Exchange data.

SK Bioscience has agreements to manufacture COVID-19 vaccines for AstraZeneca and Novavax Inc in Korea and received regulatory approval in November to begin clinical trials of its COVID-19 vaccine.

“SK Bioscience had the opportunity to become a global vaccine company by being selected to develop and manufacture for the COVID-19 vaccine procurement program known as COVAX,” said Han Byung-hwa, an analyst at Eugene Investment & Securities. COVAX is the program supported by the World Health Organization to provide vaccines to poor and middle-income countries.

“It is the only chosen company that conducts development and production simultaneously,” Han said, speaking before the shares began trading. “After (the vaccine) is approved, the revenue will start coming in the second half.”

SK Bioscience’s IPO has garnered more than last year’s successful quotes in business sectors that thrived during the pandemic, such as game developer Kakao Games and affiliate SK Biopharmaceuticals.

“Interest (in South Korean IPOs) is skyrocketing from retail institutions and investors and liquidity is abundant. This should continue, ”said Park Jong-sun, an analyst at Eugene Investment & Securities, speaking ahead of SK Bioscience’s debut.

Reportage by Joyce Lee and Jihoon Lee; Editing by Christopher Cushing and Kenneth Maxwell