Reigncom soars, shares double on Kosdaq debut
Reigncom, a local manufacturer of MP3 players, emerged as the new star on the over-the-counter Kosdaq market yesterday, soaring to above 100,000 won ($76) on its first trading day.
Market watchers said Reigncom shares closed at 105,200 won, which is more than double the initial public offer price of 47,000 won.
The 47,000 won IPO price also topped the list of companies that registered on the Kosdaq this year.
"Considering the 500 won face value of Reigncom, this is remarkable," said Lee Ho-jin, an analyst at Shinyoung Securities who predicted the winning streak will go on for some time.
Reigncom, more famously known for its MP3 Player "iRiver," boasts a 20-percent share of the world's multimedia player market.
According to company president Yang Duk-jun, who recently became Korea's third-wealthiest person based on the value of his Reigncom shares, the venture firm owes its success to innovative technology and strategic tie-ups with leading foreign players.
"We are joining hands with Microsoft Corp. next year to jointly develop a new portable multimedia player," he said, a fact that gave his shares an added boost on the market.
This year, Reigncom expects to rake in 220 billion won in sales, a huge jump from the 70 billion it raised during its first year in business.
As of yesterday, Yang's shares were worth an estimated 163.5 billion won, the highest following Lee Jae-woong of Daum Communication and Lee Hae-jin of NHN, an online search engine. Both companies are listed on the Kosdaq.
Other employees at Reigncom also benefited from the IPO as nearly half of the company's 260 staff each hold between 1,000 and 5,000 shares.
Citing strong fundamentals and growing demand on the market, local securities companies took a favorable stance on the MP3 player maker.
Good Morning Shinhan Securities suggested a target price 130,000 won for Reigncom shares, projecting that the venture company's net profit should rise an average 21.1 percent annually until 2006.
"The 130,000 won is the minimum line that reflects all the potential risks of competition," said an analyst at the brokerage.
Mirae Asset Securities spoke with a similarly optimistic tone but warned that investors should keep in mind the company's heavy dependence on MP3 players and the low entry barriers to the market that could breed stronger competitors.
By Kim Ji-hyun
(jemmie@heraldm.com)
2003.12.20
