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24 January 2025

KOSDAQ Sees Fluctuations With New Listings

Day One Company's shares plummet, raising questions about debut performance amid fresh market entries.

The KOSDAQ stock market witnessed significant fluctuations on October 24, 2023, as new listings for companies Day One Company, Wise Nut, and Asterasis commenced trading. Unfortunately for Day One Company, its shares took a steep tumble on their debut, dropping nearly 30% below the initial public offering (IPO) price, reflecting investor caution and market dynamics.

Trading began at 10:17 AM when Day One Company's stock was priced at 9,190 won, which is 29.31% lower than the IPO price set at 13,000 won. This underwhelming performance is notable considering the company had attracted considerable interest during the pre-IPO phase, achieving competitive rates and substantial subscription figures. The company conducted its demand forecasting from October 6 to 10, successfully attracting bids from 510 institutional investors, resulting in a staggering competition ratio of 115 to 1. Following this, general investors were able to place subscription orders on October 15 and 16, achieving yet another impressive competition rate of 133.46 to 1, with total subscription deposits reaching approximately 295.2 billion won.

Despite the promising indicators leading to the listing, Day One Company struggled to maintain its early valuation. The CEO, Lee Kang-min, expressed commitment to solidifying the company's position as the first listed firm on KOSDAQ, stating, “We will repay the trust of our shareholders through establishing our market presence after this IPO.” Lee highlighted the initiative to leverage the raised funds for penetrating both domestic and international markets, as well as pursuing aggressive mergers and acquisitions.

Moving on to Wise Nut, the company is specialized in B2B AI software, having grown through the use of natural language processing technologies since its establishment back in May 2000. According to their financial statement, Wise Nut reported 35 billion won in operating profit and 352 billion won in sales for 2023. Unlike Day One Company, Wise Nut appears to have benefited from more stable market confidence, guided by its solid business model and consistent profitability over the past 12 years.

Wise Nut set its IPO price at 17,000 won after conducting another round of institutional demand forecasting, which yielded 370 participating investors. Unfortunately, the resulting demand was less overwhelming than anticipated, with competition rates at 64.85 to 1, below many expectations. Nonetheless, Wise Nut’s entry to the market signals the firm’s ambition to boost its core business capabilities, alongside potential new product developments to expand its reach.

Another newcomer on KOSDAQ, Asterasis, has carved out its niche within the beauty and medical device sector, providing products like high-intensity focused ultrasound (HIFU) lifting devices and body composition analyzers. Asterasis demonstrated remarkable market appeal, with their demand forecasting yielding over 2,219 institutional investor participants, achieving competition rates as high as 1,242 to 1. This led to the establishment of their IPO price at 4,600 won, the upper end of their projected price band of 4,000 to 4,600 won.

Asterasis’s general investor demand proved equally irresistible, resulting in staggering metrics with competition rates hitting 1,791.34 to 1 and subscription funds totaling approximately 3.76 trillion won—illustrative of investor enthusiasm for the company’s growth prospects.

The three companies represent varied prospects and challenges as they navigate the KOSDAQ waters, with the market's response illustrating the delicate balance between investor sentiment and corporate performance. While Day One Company is currently weathering rough waters, both Wise Nut and Asterasis have shown promising initial interaction with investors, indicating differing market confidence levels.

These fluctuations spotlight not only individual company performances but also broader sentiments affecting the KOSDAQ as it continues to attract interest from new businesses seeking to list, signaling potential growth opportunities moving forward.

Overall, such movement can impact sectors beyond technology and AI, touching on beauty and healthcare, with each company’s strategy shifting as the competitive environment evolves. Investors are left with important questions about stability and growth within these new listings—each company’s ability to adapt, thrive, and maintain investor trust will be closely monitored as they take their next steps.