SEOUL/BANGKOK -- Investors in Thailand and South Korea snapped up shares in newly listed companies on Thursday, driving them sharply higher after keenly anticipated initial public offerings.
Investors in SK Biopharmaceuticals, a drugmaker, and Sri Trang Gloves Thailand, which makes protective gloves, hope both companies can capitalise on demand after the coronavirus pandemic. Their shares rose 160% and 77% respectively above their IPO prices.
Sri Trang is one of a clutch of South East Asian manufacturers that are enjoying a surge in demand for latex gloves during the pandemic. SK Biopharm, while not directly involved in coronavirus treatment, is enjoying a halo effect around South Korea's pharmaceutical and health sector after the country's relative success in containing the spread of COVID-19.
It was also South Korea's biggest IPO since 2017, when Celltrion Healthcare amassed 1 trillion won.
In Seoul, SK Biopharm's shares spiked 29.59% to 127,000 won in the morning from its starting price. The stock's offering price was 49,000 won and it debuted at 98,000 won.
The surge pushed SK Biopharm to a market capitalization of 9.9 trillion won ($8.25 billion), putting it among the 30 most valuable companies on the Kospi index. SK Holdings still controls the company with a 75% stake.
"I will try to make the Republic of Korea a powerhouse in the pharmaceutical sector," said CEO Cho Jeong-woo during a ceremony. "We developed our own original drug, and launched it in the U.S. -- the largest market in the world."
The company attracted 959 billion won ($800 million) in the initial public offering by selling 25% of its stake.
SK Biopharm specializes in developing neurological drugs. It paved the way for the IPO by winning approval in the U.S. last year for Xcopri, an epilepsy treatment. In the run-up to the IPO, the company had touted its development pipeline, saying it would begin clinical trials of a cancer treatment next year and invest 100 billion won from the share sale in new projects.
In Bangkok Sri Trang shares hit 60.25 baht per share, up 77% from the IPO price of 34 baht soon after the opening. That pushed the company's market capitalization to 86 billion baht ($2.77 billion).
Sri Trang posted net profit of 421.8 million baht in the January-March quarter of 2020, jumping 169% from the same period of last year due largely to rising demand for medical gloves during the pandemic. Revenue jumped 26% to 3.76 billion baht from the same period last year.
Investment in technology and machines have helped Sri Trang cut production costs and increase productivity.
Analysts said sentiment towards the company should remain strong. "[Even if] we successfully find a vaccine, it would take several months for Thailand to produce massive amount of vaccine. That's a long period of time that allows the company to make profits," said analysts at Kasikorn Securities.
