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| SK Biopharmaceuticals celebrates the first day of its listing on the KOSPI with a ceremony held at the headquarters of the nation's bourse operator Korea Exchange (KRX) in Seoul, Thursday morning. SK Biopharmaceuticals' CEO Cho Jeong-woo, fifth from left, and KRX CEO Jung Ji-won, fourth from left, attended the event along with other key figures of the securities sectors, including NH Investment & Securities CEO Chung Young-chae, third from right, and Korea Investment & Securities CEO Jung Il-moon, second from right. / Courtesy of Korea Exchange (KRX) |
By Anna J. Park
On the first day of SK Biopharmaceuticals' trading on the nation's benchmark KOSPI, the biopharma company's stock price reached a daily price limit soon after the stock market opened Thursday.
Upon the opening of Thursday's trading session, the firm's stock price started at 98,000 won ($81.64), and immediately hit the stock's daily increase limit of 127,000 won. Under the KOSPI market, a stock price cannot be raised by more than 30 percent a day.
Out of the entire 19.57 million shares offered, about 10.2 million were able to be traded on the first-day session, yet only about 638,000 were traded during the trading session, and most sell orders came from foreign investors. This means only about six percent of the entirety of the shares were circulated, and most investors decided to keep the stocks for a while given the confidence in the bio industry.
SK Biopharmaceuticals' market capitalization reached up to 9.8 trillion won, a higher level than 5 trillion won to 9 trillion won previously assessed by market analysts. The company previously set its initial public offering (IPO) price at 49,000 won ($40.82). During a two-day retail investor subscription period on June 23 and 24, the firm attracted over 30 trillion won of deposits, with a subscription competition rate of 323.02:1, a record-high figure in the history of IPOs in Korea.
"The company will continue to go on treading an untrodden path," the pharmaceutical firm's CEO Cho Jeong-woo said during Thursday's listing ceremony held at the nation's bourse operator Korea Exchange (KRX).
"SK Biopharmaceuticals' efforts to build its own solid system of conducting clinical trials, earning approvals and selling directly in the U.S. market has borne fruit."
He added that the firm will accelerate its development as an innovative global pharmaceutical company.
Last November, the firm's XCOPRI, an anti-epileptic drug, received approval from the U.S. Food and Drug Administration (FDA) as a treatment for partial-onset seizures in adult patients. The company has developed another drug named SUNOSI, which is a sleep disorder drug, approved by the FDA back in March 2019. It was the first time that a Korean company received the two FDA approvals with an independently developed new drug.
In an apparent move to keep the momentum of its stock value alive, the SK affiliate is expected to strengthen its marketing moves in the U.S. market with capital inflows through the successful IPO. The firm is also expected to intensify its direct sales strategy in the U.S. market, using its U.S. subsidiary SK Life Science.
Bubble or boon?
KTB Investment & Securities estimated its appropriate market cap at around 6.4 trillion won, while DB Financial Investment gave the lowest number of about 5 trillion won. Eugene Investment & Securities analyst Han Byung-hwa assessed the firm's market cap to be 9 trillion won.
"As the company is expected to report an annual revenue of at least 1.8 trillion won by 2030, the stock's appropriate market cap is estimated to be around 9 trillion won, with 110,000 won per share," the analyst said. "The company's revenue is expected to grow about 45 percent a year, on average. The annual revenue is estimated to stand at 46 billion won in 2020, 629 billion won in 2024 and 1.8 trillion won in 2030. Its operating profit is expected to turn black in 2023 with 18.5 billion won, from this year's 197 billion won worth of deficit. Its profit is expected to hit 838 billion won by 2030," he added.
Another biopharma analyst stressed that the company provides a good diversification to institutional investors in their investment portfolio.
"SK Biopharmaceuticals is gaining much attention as the next blue-chip stock of KOSPI's healthcare sector, along with Celltrion and Samsung Biologics," said Seo Keun-hee, an analyst at Samsung Securities.
However, some other market analysts warned of a possible bubble in the stock price. On condition of anonymity, a market insider told The Korea Times that he feels the current fever around the stock is excessively overheated with investors' speculative moves.
The market watcher said the stock price could go up much higher within a few months from now, yet no one can be sure of the stock price's fate after that period as the market could face a great level of uncertainty from major events like a U.S. presidential election in November.
Other market watchers also pointed out the stock's price will be largely dependent on the firm's long-term success in the overseas market.
Interestingly, SK Holdings, a holding company of SK Biopharmaceuticals, didn't seem to benefit much from the frenzy around its affiliate. SK Group's stock price has seen an upward trend for the past few days, and started strong with 308,500 won on Thursday morning. Yet its price fell gradually during the day, ending at 278,500 won, down 6.23 percent from the previous session.
Other SK affiliates, such as SK Discovery, SK Securities, SK Chemicals, all logged bearish moves during the day. Investors sold the shares as they sought to actualize short-term profits gained through the past few days, as the SK-affiliated shares rose amid a frenzy around the listing of the biopharma company.
