2020.07.11(토)

전체기사

NH Investment likely to continue to top ECM ranking The Korean brokerage firm leads the SK Biopharm’s IPO expected to be the biggest next year

Translated by Ryu Ho-joung 공개 2019-12-04 08:00:00

이 기사는 2019년 12월 04일 08:00 더벨 유료페이지에 표출된 기사입니다.

NH Investment & Securities is emerging as a strong candidate to hold number one position in the next year’s equity underwriting league table in South Korea, thanks to its senior role on SK Biopharmaceuticals’ planned initial public offering (IPO).

The IPO of SK Biopharmaceuticals, the biotech arm of South Korea’s SK Group, is expected to be one of the biggest deals in the domestic market in 2020, which could value the biotech firm as much as five trillion won ($4.2 billion). The size of the offering also seems likely to exceed one trillion won ($843 million). A successful listing would enable NH Investment, which is leading the IPO together with Citi Global Market Securities, to top the league table two years in a row, as it is almost certain that the brokerage firm will secure number one position among underwriters this year.

The domestic IPO market has seen steady growth over the last ten years, though there are only eight deals in which shares worth more than one trillion won were sold. Among them is the 4.9 trillion won ($4.1 billion) IPO of Samsung Life Insurance in 2010, currently the largest offering in the country, followed by 2.7 trillion won ($2.2 billion) IPO of Netmarble in 2017 and 2.3 trillion won ($1.9 billion) IPO of Samsung Biologics in 2016.

In particular, the domestic IPO market has been suffering from a lack of large-scale deals over the last two years. The biggest deal in all of 2018 and 2019 was the IPO of Lotte REIT, which offered shares worth mere 430 billion won ($362 million). Such a market situation explains why any underwriters that managed to lead a trillion-won-size deal could maintain their positions in the upper ranks until the year-end in recent years.

SK Biopharmaceuticals aims to list on the local bourse early next year. With the deal size likely to exceed one trillion won, the two bookrunners on the planned IPO are expected to maintain their spots in the upper rank throughout next year. With the SK Biopharmaceuticals listing only, NH Investment and Citi Global Market Securities would be able to record up to 400 billion won ($337 million) in proceeds, considering previous IPO deals with a similar size.

Moreover, NH Investment is also working on the expected IPO of Kakao Page, a mobile content platform operator owned by South Korean messaging giant Kakao. Market watchers view that the deal would likely value the company about three trillion won ($2.5 billion). “The SK Biopharmaceutical listing will be a landmark deal in 2020, with few to match in terms of size except Kakao Page’s planned IPO,” said an industry source, adding that NH Investment appears highly likely to hold number one position in equity underwriting as it is acting as bookrunner on both deals.

The SK Biopharmaceutical IPO value, currently estimated to be over five trillion won, is being propped up by its anti-epileptic treatment XCOPRI, which gained approval from the U.S. Food and Drug Administration (FDA) last month. Analysts have expected the XCOPRI market size to grow to $6.3 billion by 2024. Along with the firm’s narcolepsy drug Sunosi (solriamfetol) currently being sold in the U.S. market, XCOPRI's revenue is expected to continue to increase in the future.

Thanks to the FDA’s approval on the drug, SK Biopharmaceutical is expected to pass the preliminary examination by the Korea Exchange as early as this month.

(By reporter Yang Jung-woo)
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