With the shipbuilding industry enjoying a boom, small and medium-sized shipyards and shipbuilding equipment corporations are pushing for initial public offerings (IPOs). They believe it is a moment when their corporate value can be highly assessed due to the increase in workload in the shipbuilding sector.
According to the shipbuilding industry on the 17th, S&SYS, a supplier of marine equipment, has applied for a preliminary listing review with the Korea Exchange’s KOSDAQ market headquarters on the 10th and is undergoing the review. The number of shares to be publicly offered is set at 1.9 million shares. Shinhan Investment Corp. is serving as the underwriter.
An official from S&SYS noted, “The target offering price is between 28,000 won and 32,000 won per share, and we plan to raise about 50 billion to 60 billion won through the listing.”
S&SYS is a company established in 2017 from the separation of Samsung Heavy Industries’ electrical and electronic division. It supplies systems for ballast water treatment (seawater added to maintain the ship’s center of gravity), navigation control solutions, and solutions for ship electrical systems.
As a result of the downturn in the shipbuilding industry, Samsung Heavy Industries pushed for the sale of its business unit, prompting Baek Jae-hyeok, the then head of the electrical team, and employees to jointly acquire equity and establish independence. It was founded as an employee stock ownership plan, with Baek holding 14.93% and three founding members (Jeong Tae-kyung, Lee Tae-young, and Hwang Wae-yeol) each holding 6.47%, sharing equity among employees. Samsung Heavy Industries is the largest shareholder with a 19.98% stake in S&SYS but does not participate in management.
S&SYS has reported annual sales in the 100 billion won range since 2019. In 2023, sales reached 106.3 billion won, a decrease of about 11% compared to the previous year, but last year sales increased by about 30% to 138.1 billion won. Last year’s operating profit also rose by 20% to 15.5 billion won. Based on the improved performance, it has begun preparations for its listing.
S&SYS plans to invest the offering funds in expanding its Busan factory, which was completed in 2021, establishing a new factory in the Seoul metropolitan area, and setting up a factory in Geoje City. It also plans to invest in expanding its production capacity for electrical distribution boards, building production facilities in China, and developing an eco-friendly dual fuel propulsion system. Through these efforts, it aims to reduce its dependence on Samsung Heavy Industries, which currently accounts for about half of its sales, and diversify its revenue sources.
Daehan Shipbuilding, a medium-sized shipyard, submitted its application to list on the securities market on the 4th and is undergoing reviews. Daehan Shipbuilding is pursuing an IPO for the first time in a decade since it exited corporate rehabilitation procedures in 2015 amid restructuring in the shipbuilding industry.
Daehan Shipbuilding builds medium-to-large crude oil carriers (tankers) and has accumulated about three years’ worth of orders. It has been evaluated to have technical competitiveness compared to Chinese shipyards by expanding eco-friendly technologies in its vessels. Daehan Shipbuilding aims for a market capitalization of 1 trillion won.
Source: CHOSUNBIZ
