Since the launch of Lee Jae-myung's government, the Korea Composite Stock Price Index (KOSPI) has shown an upward trend, creating a green light for the public offerings (IPOs) of corporations targeting listings in the second half of this year, including Hanwha Energy and SK Innovation. However, Hanwha Energy is the second-largest shareholder with a 22.16% equity stake in Hanwha Corporation, while SK Innovation's SK Enmove is a subsidiary focused on lubricants, which raises concerns about duplicate listings.
According to industry sources on the 23rd, Hanwha Energy and SK Enmove have completed the selection of their lead underwriters. The Hanwha Energy IPO will be jointly managed by Korea Investment & Securities, NH Investment & Securities, and Daishin Securities. The lead underwriters for SK Enmove are Mirae Asset Securities and Korea Investment & Securities.
Hanwha Energy is considered a key player in the succession of management, as it is fully owned by the three sons of Chairman Kim Seung-yeon: Kim Dong-kwan, Vice Chairman of Hanwha (50%), Kim Dong-won, President of Hanwha Life (25%), and Kim Dong-sun, Vice President of Hanwha Galleria (25%). If Hanwha Energy goes public, the three brothers can sell some of their equity to secure cash. A Hanwha Group official noted, "We have not reached a decision regarding the IPO process."
SK Enmove, a lubricant business subsidiary of SK Innovation, is pursuing its fourth IPO. This marks the first attempt at going public in seven years since its last challenge in 2018. SK Enmove's equity is held 70% by SK Innovation and 30% by the private equity firm IMM Credit Solution.
In 2021, SK Innovation sold 16 million shares of SK Enmove to IMM Credit Solution for approximately 1.2 trillion won. It set a condition that SK Enmove must go public within five years and achieve an internal rate of return (IRR) of over 5.7%. If SK Enmove fails to go public by next year, SK Innovation must pay IMM Credit Solution 1.6 trillion won.
Concerns about duplicate listings could pose a hurdle. The Korea Exchange required measures to protect shareholders in a preliminary meeting for listing review held in April regarding SK Enmove's duplicate listings. They expressed concerns that SK Innovation's value could decline after SK Enmove's listing.
Hanwha Energy also faces challenges related to duplicate listings. In the securities market, the Hanwha Energy IPO is viewed as a precursor to the merger of Hanwha Energy and its parent company Hanwha Corporation. This resulted in a 10.39% plunge in Hanwha Corporation's stock price after news broke of Hanwha Energy selecting its underwriters in March.
The continued rise of the KOSPI is a positive factor. Securities firms are raising their forecasts for the second half. NH Investment & Securities predicted that the KOSPI could rise to as high as 3,100 points in the latter half of the year.