BTS’ label, SK Biopharm gearing up for billion-dollar IPOs in 2020

  • 2020-05-19

Big Hit Entertainment Co. Ltd., the label behind the K-pop boy band BTS and SK Biopharmaceuticals Co. Ltd. are moving ahead with their planned initial public offerings this year, which are estimated to raise over one trillion won ($810 million) respectively.

Despite fears of the coronavirus economic fallout, both companies believe now is the right time to go public on the Korea Stock Exchange, according to investment banking sources on May 17.

SK Biopharm has just launched its epilepsy treatment in the US after winning approval from the US Food and Drug Administration.

Big Hit Entertainment is aiming to complete its IPO before the BTS’ seven boys begin mandatory military service. Its oldest member Jin is expected to join the army in December when he turns 28.

Their prospective IPOs are expected to be the largest offerings in South Korean stock markets since gaming company Netmarble Corp. raised 2.7 trillion won in its stock market debut in 2017.

Big Hit Entertainment is preparing to submit an IPO application within the first half and complete the listing before the year’s end. It is set to become the first entertainment company to be listed on the main bourse, with its rival companies traded on the junior Kosdaq market.

With an estimated corporate value of up to 6 trillion won, Big Hit is likely to raise more than 1 trillion won through the IPO.

Given that most of its revenues stem from the BTS, the company is seeking to reduce the impact of their absence. It has recently rolled out a mobile game using the images and video contents of the BTS members, BTS World, via its second-largest shareholder Netmarble. It plans to launch a new BTS-related game in the second half of this year.

Netmarble holds 25% of Big Hit. Chairman and CEO Bang Si-hyuk, who founded the firm in 2005, owns 43%.

Last year, its operating profit came to 98.7 billion won on sales of 587.2 billion won on a consolidated basis.

SK BIOPHARM

With an estimated corporate value of 5 trillion won, the unit of the energy-to-telecom conglomerate SK Group is embarking on the IPO process this month to list by the end of the first half.

SK Biopharm, wholly owned by refiner SK Corp., has developed the anti-epilepsy drug Xcopri and launched the treatment in the US market last week.

Meanwhile, DreamCIS, a contract-based research and clinical trial services company, is scheduled to debut on the junior Kosdaq market on May 22, in the first IPO in the country since March.

It offered its shares at the higher end of its price band last week to raise a total of 20 billion won. The institutional tranche for the stock was oversubscribed by 930 times. The company is the South Korean arm of China’s Hangzhou Tigermed Consulting.

“Since the accelerated bookbuilding for DreamCIS, demand for IPO stocks has been recovering. SK Biopharm, which is seen as the biggest IPO (in South Korea) this year, will set the tone for the IPO market going forward,” one of the sources told the Korean Investors.

Fried chicken franchise Kyochon F&B Co. Ltd. submitted an application last month to become the first franchise operator to list in South Korea. It is seeking to list in the second half of this year.

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ace@hankyung.com

<Edited by Yeonhee Kim>