In response to pent-up demand for robotic equities, shares of South Korea’s Doosan Robotics (454910. KS), whose robots can pour beer and brew coffee, more than quadrupled from their initial public offering (IPO) price in their Seoul market debut on Thursday.
The business priced the shares at 26,000 won each, the top of the price range signaled to investors and raised 421.2 billion won ($317 million) in South Korea’s largest IPO this year.
Shares of Doosan Robotics soared as high as 67,600 won in early trade before ending at 51,400 won, a 127% increase from the IPO price. The stock began at 59,100 won per share. The whole market (.KS11) finished 0.1% down.
“There is a risk of short-term stock price volatility due to the recent high market interest in the robot sector,” said Seo Jae-ho, analyst at DB Financial Investment. Shares of smaller competitor Rainbow Robotics (277810. KQ) have increased 312% year to date due to pent-up demand for robotics stocks.
Doosan is one of the top manufacturers of so-called collaborative robots, which are increasingly employed for activities at cafés and bars.
Doosan’s successful trade debut is a rare sign of hope for IPO debutants globally lately, as many have either been quickly sold off or have failed to maintain their issue price in the first few days.
According to LSEG statistics, South Korean corporations raised $1.7 billion in fresh proceeds during the first nine months of 2023, a decrease from $12.7 billion over the same time in 2018.
In 2022, battery manufacturer LG Energy Solution raised $10.8 billion in the largest-ever IPO in the nation.
The state-backed Seoul Guarantee Insurance Company, expected to be valued at up to 3.4 trillion won, battery component manufacturer Ecopro Materials, and HD Hyundai Global Service, hoping to raise $1 billion in the first half of 2024, are among the companies planning to go public.
ROTARY GROWTH
Contrary to many previous IPOs, investor demand for Doosan Robotic’s offering was robust, even in important financial hubs like Hong Kong, where the possibility of rising interest rates has dampened the mood for share sales.
According to a Doosan Robotics filing, the institutional side of the transaction was covered 272 times. At the same time, regular shareholders had to make the highest deposit on the South Korean stock market this year—33.1 trillion won—to get their entire entitlement.
Doosan Robotics’ revenue in 2022 was split equally across North America, Europe, and South Korea, with each region contributing roughly 30% of total sales.
Due to population declines, labor shortages, sharp increases in labor prices, and reshoring in many nations, there is a sizable and expanding market to enter despite competition from Japan’s Fanuc (6954.T) and Denmark’s Universal Robots, according to Yang Seung-yoon, analyst at Eugene Investment & Securities.
According to Yang, the market expansion of Doosan Robotics is timed well since early movers are expected to become established due to interoperability with existing facilities. According to the business, which cited research firm Markets and Markets, the worldwide robot industry is anticipated to increase from $966 million in 2022 to $2.157 billion in 2025, with an annual growth rate of nearly 36%
