[Korea Highlight Stock] 'SHIFT UP' rallies 18% on first day on KOSPI... Korean gaming company becomes 4th in market cap

[Korea Financial Times, Jeon HanSin] Game developer 'SHIFT UP'(CEO Kim Hyungtae) gained more than 18% on its first day of trading on the Korea Stock Exchange (KOSPI), making it the fourth-largest game stock by market capitalization in Korea.

According to the Korea Exchange, 'SHIFT UP' closed at 71,000 won, up 18.33% from its initial public offering price of 60,000 won. 'SHIFT UP' soared 49.17% to KRW89,500 shortly after the listing, but later gave back some of the gains. Trading volume and value were 17.01 million shares and 1.342 trillion won, respectively.

Previously, 'SHIFT UP' has been successful in demand forecasting for institutional investors and public share offerings for retail investors.

The demand forecast, which took place from June 3rd to 27th, attracted 2,164 institutions, resulting in a 225.94 to 1 competition ratio. All institutions that participated in the demand forecast (including those that did not submit a price) submitted prices at or above the upper end of the desired offering price band (47,000 to 60,000 won), finalizing the final offering price at the upper end of 60,000 won.

The initial public offering, which was held on the 2nd and 3rd of this month, attracted a 341.24 to 1 competition ratio and attracted a margin of 18.55 trillion won. This is more than two to three times higher than the typical subscription margin raised by a large game company listed on the KOSPI.

Founded in 2013, 'SHIFT UP' is a global game developer with a wide range of IP. It is said to have secured a favorable revenue structure through favorable publishing (game distribution) contracts and has the potential to secure favorable contract terms for its next game.

'SHIFT UP' plans to use the total proceeds of KRW 435 billion from the IPO to expand its IP and strengthen its game development infrastructure. 'Goddess of Victory: Nikke" and "Stellar Blade," as well as strengthening existing IPs such as "Project Witches," will be utilized as resources for development.

"'SHIFT UP' has secured a favorable revenue distribution structure with its IP power and proven development capabilities, which has the potential to achieve more favorable revenue distribution conditions for its future game pipeline," said Kim Dong-woo, a researcher at Kyobo Securities. "As of last year, the labor-to-sales ratio was 81%, and the publishing partner bears most of the variable costs such as marketing expenses and platform fees, so it has a structure that can maximize sales leverage effects depending on the success of the game."

Jeon HanSin (pocha@fntimes.com)