A stock that wasn’t so popular when it went public…but has already risen over 70%?
This is the story of TMC, which entered the KOSDAQ market as the first IPO (initial public offering) this year. With a low competition ratio of 31.3 to 1 in the institutional demand forecast, the general subscription competition ratio was only 0.81 to 1, and investors were turned away. As a result, the offering price was finalized at 28,000 won, a 13% discount to the lower end of the offer band (32,000 won to 28,000 won).
Monthly graph of TMC stock price.
Turnaround for an oversubscribed company…72% share price increase in less than 5 months
On the first day of trading (January 19), TMC opens at 27,950 won and touches an intraday high of 32,900 won, but eventually closes at 28,100 won. Investors who were allocated shares in the public offering missed out on the fun. However, the closing price on the 5th was 48,400 won. In less than five months, the stock price has increased by 72.86% from the initial public offering price. If you invested 1 million won in the public offering, your stock is now worth 1.786 million won.
TMC is a materials company that specializes in manufacturing and selling specialty gases and medical gases used in semiconductor and display processes. It is headquartered in Boeun-gun, Chungcheongbuk-do and was founded in January 2015. It has developed Korea’s first neon (Ne) gas extraction equipment and refining technology, and is developing crypto refining technology. It has secured domestic customers such as Samsung Electronics, SK Hynix, and DB Hi-Tech, and various chipmaker customers such as TSMC and Intel. In December 2018, the company was awarded the USD 5 million export tower on Trade Day, and three years later, it reached the USD 30 million export tower.
Photo: Getty Images Bank
“Major competitors include Wonik Materials, Linde Korea, Korea Methison Specialty Gas, and Air Liquide Korea,” Yujin Investment & Securities said in a report. However, it analyzed that “TMC is the only company in Korea that can cover the entire process from raw material procurement, raw material separation and purification, as well as inspection and measurement.”
“Expected sales of 383.7 billion won and operating profit of 61.1 billion won this year”
Expanding sales of new localized products and diversifying customers were also seen as investment points. “The company is pushing to expand sales of diborane (B2H6), deuterium (D2), and COS,” said Park Jong-sun, a researcher at Yujin Investment & Securities. “Diborane, which relied entirely on overseas sales, is expected to start selling to Samsung Electronics and SK Hynix this year, and deuterium is scheduled to be mass-produced after completing sample supply with SK Hynix,” Park said. This year, the company forecasts sales of 383.7 billion won and operating profit of 61.1 billion won. Compared to two years ago, sales are expected to surge by 325.39% and operating profit by 381.10%.
Capture of the homepage of TMC.
The total number of shares is 10.62 million, and the largest shareholder is CEO Yoo Won-yang and 11 others with a 32.67% stake (3.47 million 1856 shares). Major shareholders with more than 5% are POSCO GEM Fund No. 1 with 9.54% (1,036,623 shares), SBIC No. 52 New Technology Business Investment Association with 8.32% (843,779 shares), and Asset Plus Asset Management with 5.02% (530,533 shares).
Foreigners continue to increase their stakes. From 0.10% on Jan. 19 to 3.36% on Jan. 5. The float is just over 40%.
Screen capture of TMC’s holdings.
On the 5th, a securities industry insider said, “Thiem C’s안전놀이터 strength is the expansion of the use of specialty gases due to the deepening of process difficulties, and the warmth of the customer diversification effect is expected.” In particular, “profit margins are expected to expand through self-sourcing of raw materials,” he added. “However, a slowdown in profits due to the normalization of special gas prices is considered a risk factor,” he said. “New investors should be cautious about buying as the stock price is at a short-term high,” said another, adding, “As the semiconductor sector is gaining prominence, it is recommended to take a split-buy approach in case of a correction.”
Meanwhile, a reporter asked TMC about its shareholder return program and business plan, but the company did not respond.