Hyundai Wia rose to 70,200 won on the Korea Exchange at the 3 p.m. close on the Korea Exchange, compared with the initial public offering price of 65,000 won, after investors bid for 103.7 times the number of shares allocated to individuals in the IPO. The stock earlier surged as much as 18 percent to 76,500 won. The benchmark Kospi Index fell 0.4 percent.
Global auto sales may exceed 80 million vehicles in 2012, Jeff Schuster, director of forecasting for researcher J.D. Power and Associates, said in December. Hyundai Motor, the fastest- growing mass-market automaker in the U.S. last year, and affiliate Kia Motors Corp. expect to boost sales 10 percent this year because of new models and rising demand in emerging markets including China and developed markets such as the U.S.
“What’s attractive about this company is that it has fast- growing automakers as its biggest shareholders,” said Suh Sung Moon, an analyst at Korea Investment & Securities Co., who rates the stock a “buy” with a 12-month share-price estimate of 85,000 won. “I’m also optimistic because demand for machinery is recovering and the company has a good relationship with its labor union.”
Machine Tools, Weapons
Hyundai Wia, which also produces machine tools and weapons, and its shareholder Kia Motors together raised 520 billion won ($467 million) by offering 8 million new and existing shares at above the indicative price range of 53,000 won to 60,000 won apiece in the IPO. Mirae Asset Securities Co. arranged the sale.
Hyundai Motor owns a 33.3 percent stake in Hyundai Wia, while Kia holds 17.7 percent after the share sale.
Hyundai Wia’s net income more than doubled to 77 billion won in the first nine months of 2010 from a year earlier, according to a Nov. 15 regulatory filing. It has yet to release data for the full year.
South Korean companies raised a record 10.1 trillion won in IPOs last year, according to Korea Exchange Inc., as they bet an economic recovery, corporate earnings growth and low interest rates would boost equities.