SKIET's first-day pop moderates after stock debuts at double IPO price

SEOUL/HONG KONG (Reuters) – Battery material maker SK IE Technology Co Ltd (SKIET) saw its stock hover up 50% on its debut day, pulling back from market open when it started trade at double the price set during its record-breaking initial public offering (IPO).

SKIET’s shares opened at 210,000 won on Tuesday, valuing the manufacturer at about 15 trillion won ($13.44 billion).

They dropped as much as 26% from that peak as the day wore on, compared with a 1.5% fall in the KOSPI benchmark share price index.

The pop and immediate decline came after major electric vehicle (EV) stocks were sold off on Wall Street overnight – including leader Tesla Inc, which lost 6.8% – during a broader U.S. tech rout, setting a negative tone for SKIET’s debut, said Clepsydra Capital founder Sanghyun Park.

SKIET supplies separators, a key component in lithium-ion batteries, to battery makers including parent SK Innovation Co Ltd, Samsung SDI Co Ltd, LG Energy Solution Ltd and Japan’s Panasonic Corp.

“The latest bashing of the EV stocks on the NASDAQ seems to be affecting SKIET’s market debut,” Seoul-based Park, who publishes on Smartkarma, told Reuters.

Retail demand for local IPOs was the main force behind expectations for bullishness on SKIET stock, he said.

“But with another EV sector cooling-down like we saw yesterday in the U.S., even local retail investors have had a hard time maintaining the enthusiasm on SKIET whose business is directly correlated to the global EV sector,” said Park.

The listing comes as automakers worldwide increasingly add and even replace traditionally powered cars in their line ups with new-energy alternatives such as fully battery-powered electric vehicles.

The trend pushed revenue from battery separators last year to 56% of SKIET’s total sales, accelerating from 19% in 2018.

SKIET priced its IPO last month at 105,000 won per share, the top of its indicative price range. SK Innovation said the IPO’s institutional book was almost 2,000 times covered – the largest-ever for South Korea.

SKIET’s first-day stock market performance echoed that of Hybe Co Ltd – formerly Big Hit Entertainment, and manager of K-Pop boy band BTS – whose share price doubled on debut in October. That stock ended negative on the day.

Chief Executive Rho Jae-sok has said SKIET will use money raised through the sale of new shares for capital expenditure, with such spending topping 700 billion to 800 billion won annually for the next few years.

SKIET operates factories in South Korea and China. In March, it said it would spend about 1.13 trillion won building two plants in Poland.

($1 = 1,116.4300 won)

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