| Hyundai Heavy Industries' promotional image from its website / Courtesy of Hyundai Heavy Industries |
By Anna J. Park
The debut of Hyundai Heavy Industries (HHI) on the KOSPI was quite a roller coaster ride. The initial price of the newly offered shares was put at 111,000 won ($94.32) at the beginning of the trading session, 85 percent higher than the stock allotment offering price of 60,000 won.
After trading started at this valuation at 9 a.m., the price nosedived to 91,000 won, an 18 percent fall, after just six minutes.
However, it then soared to 135,000 won, up 21.6 percent, during the next thirty minutes; but in the following five minutes, the price fell again to 114,000 won. The price's ups and downs continued during the session, until it closed at 111,500 won, a 0.45 percent increase from its opening.
At this closing price, the shipbuilder's market capitalization stood at 9.98 trillion won, the 43rd highest among KOSPI listed companies, but the largest in the shipbuilding industry, exceeding Korea Shipbuilding & Offshore Engineering's (KSOE) 7.4 trillion won, Samsung Heavy Industries' 3.8 trillion won, and Daewoo Shipbuilding & Marine Engineering's (DSME) 3 trillion won.
KSOE is the parent company of HHI.
Founded in 1972, HHI became the global leader in shipbuilding in 1985, and has maintained the top position since in terms of the amount of orders received. The company logged annual revenue of 8.3 trillion won last year with an operating profit of 32.5 billion won. The company was spun off from KSOE in 2019.
Foreign investors net sold 1.7 million shares, while retail and local institutional investors net purchased the stock Friday. As only 1.2 percent of shares held by foreign institutional investors are locked up, market watchers are expressing concerns of a possible “hangover” due to the millions of shares held onto by foreign investors.
HHI logged a subscription competition rate of 1,835.87:1 among institutional investors early in the month, the second highest ever among companies listing on the KOSPI, following SK IET at 1,883:1. Retail investors' stock allotment competition rate was 405.5:1, attracting 56 trillion won.
The company is planning to invest the raised IPO capital into eco-friendly technology development and next generation ships.