Daehan Shipbuilding IPO, The 'Big Fish' Is It Worth 'All-in'? (Demand Forecasting, Subscription Strategy Summary)
A 'big fish' has finally appeared in the IPO market after a long time. Daehan Shipbuilding, a mid-sized shipyard specializing in the construction of medium to large tanker vessels, is the protagonist. With expectations for a super cycle in the shipbuilding industry and explosive reactions from institutional investors, it has emerged as the biggest IPO in the second half of the year.
What kind of charm does Daehan Shipbuilding possess to be so hot? We analyze everything in detail, from the results of institutional demand forecasting to subscription strategies for individual investors.
1. Daehan Shipbuilding, What Kind of Company Is It? - A 'Solid' Mid-Sized Shipbuilder
- Main Business: Specialized in the construction of medium to large merchant ships, such as crude oil tankers and bulk carriers.
- Financial Status: Successfully turned around after being acquired by KHI (now SM Group) in 2022. Sales are expected to exceed ₩1 trillion in 2024, and in particular, an operating profit margin of 14% is the highest in the industry, surpassing even large shipbuilders.
- Order Backlog: As of August 2024, it has already secured 3 years' worth of work, with stable growth expected.
2. How Did Institutions Evaluate It? - 'Unprecedented' Demand Forecasting Results
Institutional investors' evaluation was truly 'enthusiastic'.
- Institutional Competition Ratio: 275.66 : 1 (2,106 institutions participated)
This is a very high competition ratio, considering it's a large IPO with a market capitalization approaching ₩2 trillion. - Mandatory Lock-up Ratio: 56.85% (by quantity)
This is the most important indicator. More than half of the participating institutions promised not to sell their shares immediately after listing, meaning they highly valued Daehan Shipbuilding's long-term growth potential. - IPO Price: Fixed at ₩50,000, the highest end of the desired band.
98.6% of institutions proposed prices at or above the upper end.
3. Individual Investor Subscription Information and Strategy
Now, here's the most important information for individual investors' subscriptions.
- Subscription Period: July 22 (Tue) ~ July 23 (Wed)
- Refund Date: July 25 (Fri) (Takes 2 days)
- Listing Date: August 1 (Fri) (Sole listing)
- Underwriters: KB Securities, NH Investment & Securities, Shinyoung Securities
- Minimum Subscription: 10 shares (Subscription deposit ₩250,000)
✅ Equal Allocation Strategy
- Expected Allocation Quantity: 1-2 shares are likely to be allocated depending on the number of subscription accounts.
- 'Chicken Money' is Certain!: Given the enthusiastic response from institutions, the possibility of the stock price falling below the IPO price on the listing date seems very low. Even by just receiving equal allocations using multiple brokerage accounts, you can expect a modest profit.
✅ Proportional Allocation Strategy: The Start of 'All-in' Consideration
- High Competition Ratio Expected: Considering the recent IPO market atmosphere and the popularity of Daehan Shipbuilding, the proportional subscription competition ratio is expected to be very high. Based on the LG CNS subscription (deposit ₩21 trillion), it is estimated that 1 share will be allocated per approximately ₩17 million.
- Underwriter Selection: Funds are likely to flock to KB Securities and NH Investment & Securities, which have the largest allocation quantities. Shinyoung Securities, with relatively fewer accounts and lower limits, could be a variable in the 'eye-balling game', but the prevailing view is that there will be no significant difference.
- Is It Worth 'All-in'?: All conditions point to 'growth', including the unprecedented lock-up ratio of institutions, low circulating volume, shipbuilding theme, and sole listing. The dominant evaluation is that it is well worth actively participating in the proportional subscription, even at the cost of 2 days' loan interest.
4. Final Conclusion
While some investors may have painful memories from the LG CNS listing, Daehan Shipbuilding shows much more positive indicators in terms of circulating volume, lock-up ratio, and other aspects.
A 'reliable' IPO giant has arrived after a long time. Securing a modest profit through equal allocation or aiming for active investment through proportional allocation can both be good strategies. This week, make sure to manage your busy IPO schedule well to achieve good results.
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