Zinus IPO attracts foreign interests Foreign long-term funds show interests thanks three investor meetings abroad
이 기사는 2019년 10월 22일 08:00 더벨 유료페이지에 표출된 기사입니다.South Korea's mattress and furniture manufacturer, Zinus has attracted strong interests from long-term institutional investors such as Asian sovereign wealth funds (SWF) for its much-anticipated initial public offering (IPO). Those long-term funds' participation is likely to remove overhang issue on the first trading day.
According to investment banking industry, Zinus has recently attracted demands for its shares from foreign long-term funds. Asian major SWFs were willing to participate in the IPO and some long-term funds reportedly inquired separately about large-scale equity investment rather than IPO.
This year, Zinus held three investor meetings in Hong Kong and Singapore. Before IPO plan was set, the mattress manufacturer had two non-deal roadshows (NDR) to test interests and held a deal roadshow after filing a registration statement in early October to actively promote the participation in the IPO. It is reportedly the company has garnered interests from foreign long-term funds at the deal roadshow this month.
Market experts expect Zinus will likely to remove concerns on overhang on the stock on the first day of listing. After holding three investor meetings abroad, the mattress producer could address the overhang problem, which is the biggest concern among new entrants.
On the day of its debut, 57.9 percent of total offering amount will likely be sellable immediately. Stock price may fluctuate if more than half of shares are traded simultaneously. Thanks to foreign long-term funds who showed their interest during the investor meetings, Zinus has somewhat removed the concerns on the stock trading below the listing price in the market debut.
Zinus also has solved problems of overhang from minority shareholders. Zinus was listed on Korea's main bourse KOSPI, but was delisted in 2005. The mattress company now has 4745 minority shareholders, who will own a 37.3 percent stake after the listing. As there is no-lock period, they can be the Achilles heel of stock price volatility.
However, Zinus stock has been traded in the over-the-counter (OTC) market for the past five years, at a price higher than potential IPO price. It is said some of existing shares already changed hands through profit-taking.
Zinus unlisted stocks have been traded in the Korea-OTC market since September 16, 2014. On April 21, 2017, the stock set all-time high at 490 thousand won. "Amid sluggish stock market, investors take conservative stances in the IPO market. The fact that the company removed some factors such as overhang is positive ahead of the subscription," a market expert said.
The mattress manufacturer sells about 1400 kinds of products mainly through online channels. According to consolidated financial statements, Zinus recorded 338.5 billion won of accumulated sales as of end of June, up 36 percent compared to the same period last year. Its accumulated operating profit was amounted to 42.2 billion won, up almost 300 percent compared to the same period last year.
Zinus run the book-building process on October 16 and 17. It will sell more than three million shares on KOSPI and its desired price is 80 thousand~90 thousand won per share.
(By reporter Jeon Kyung-jin)
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