HD Hyundai Marine Solution, the ship repair unit of South Korean conglomerate HD Hyundai, saw its shares soar 97% on its trading debut, reaching a market capitalization of $5.1 billion. The company’s IPO was priced at the top end of its range, leading to a strong start on the Korea Exchange.
The IPO raised 742 billion won, marking the largest listing in South Korea since LG Energy Solution raised a record 12.75 trillion won earlier in 2022. HD Hyundai Marine plans to utilize the proceeds from the IPO to build ports and warehouses, fund acquisitions, and expand its services. The company specializes in ship maintenance and repair, with expectations that increasing environmental regulations will drive demand for its retrofitting services.
Majority-owned by HD Hyundai, led by co-CEOs Kisun Chung and Kwon Oh-gap, HD Hyundai Marine has seen steady growth in revenue and net income. For the fiscal year 2023, the company reported a 6% increase in revenue to 1.1 trillion won and a 26% rise in net income to 143 billion won. Investors are optimistic about the potential for growth in the industry as shipping firms seek to become greener in compliance with regulations.
The company sold 8.9 million shares in the IPO, with half of them coming from KKR, the U.S. private equity firm that remains the company’s second-largest shareholder despite the partial stake sale. HD Hyundai Marine was spun off from HD Hyundai Heavy Industries in 2016 as part of a restructuring effort. The largest shareholder of HD Hyundai is billionaire Chung Mong-joon, with a 26.6% ownership stake in the company.
HD Hyundai Marine is based in the port city of Busan and focuses on maintaining and repairing ships and engines. The strong performance on its first day of trading reflects investor confidence in the company’s potential for growth and success in the industry. The company’s strategic use of the IPO proceeds indicates a clear plan for expansion and development in the future.
Overall, the successful debut of HD Hyundai Marine Solution on the stock market highlights the strength of South Korea’s industrial sector and the potential for growth in the shipping industry. With a focus on sustainability and compliance with environmental regulations, the company is well-positioned to capitalize on the increasing demand for greener solutions in the maritime sector. Investors are optimistic about the company’s future prospects and its ability to continue delivering strong financial results in the years to come.