이 기사는 2021년 05월 18일 07:46 thebell 에 표출된 기사입니다.

Hyundai Engineering, the plant engineering affiliate of South Korea’s Hyundai Motor Group, has picked Mirae Asset Securities, KB Securities, and Goldman Sachs to lead its planned initial public offering (IPO).

Hyundai Engineering completed its selection process one month after it distributed a request for proposals to around 10 securities firms at home and abroad to pick its IPO underwriters last month.

The company is expected to hold a meeting with underwriters and draw up strategies for the listing, focusing on the valuation and the sale of shares held by Hyundai Motor Group chairman Chung Eui-sun.

Mirae Asset Securities and KB Securities are expected to be responsible for leading due diligence and establishing IPO structure while Goldman Sachs is likely to handle marketing campaigns toward foreign institutional investors.

Market insiders widely expected NH Investment & Securities and Korea Investment & Securities to be picked as underwriters, but they failed to make it to the final list.

Brokerage firms which participated in the presentation process earlier this month estimated Hyundai Engineering’s valuation to be around 6 trillion won ($5.3 billion) to 7 trillion won. The three underwriters reportedly plan to build the IPO structure based on the valuation.

“Most of the brokers offered valuations of 5 trillion won to 10 trillion won during their presentations,” said an industry source. “Some investment banks offered more than 10 trillion won, which wasn’t regarded as a realistic value.”

The estimated valuation of 6 trillion won to 7 trillion won is in line with a valuation calculated based on the price to book ratio (PBR) of Hyundai Engineering’s peer group.

Construction and engineering companies listed on domestic stock exchanges have an average PBR of around 1.78 times. GS Engineering & Construction had a PBR of 0.84 times, Hyundai Engineering & Construction 0.88 times, Daewoo Engineering & Construction 1.14 times, Samsung C&T 0.74 times, and Samsung Engineering 2.31 times based on their net asset value at the end of 2020.

Hyundai Engineering’s net asset value stood at around 3.56 trillion won at the end of 2020 on a consolidated basis. After applying its peer group’s average PBR of 1.78 times, the firm’s estimated valuation comes to around 6 trillion won to 7 trillion won, which is 3 trillion won to 4 trillion won less than its market capitalization of 9 trillion won to 10 trillion won in the over-the-counter-market. (Reporting by Cheol Kang)