KKR-Backed Hyundai Ship Repair Company Jumps 97% In Stock Market Debut

HD Hyundai Marine Solution’s IPO is the biggest in South Korea since LG’s electric vehicle battery maker raised $10.7 billion in early 2022.

Ships sail in front of a gantry crane at an HD Hyundai Heavy Industries shipyard in Ulsan, South Korea.

Shares of HD Hyundai Marine Solution, the ship repair unit of South Korean billionaire Chung Mong-joon’s shipbuilding giant HD Hyundai Heavy Industries, jumped 97% in their trading debut on Wednesday, boosting its market capitalization to 7 trillion won ($5.1 billion).

HD Hyundai Marine’s shares closed at 163,900 won on their first day of trading on the Korea Exchange. The company’s IPO was priced at 83,400 won a share, at the top end of its marketed range.

HD Hyundai Marine sold 8.9 million shares in the IPO, with half of that from holdings of KKR. The U.S. private equity giant invested in HD Hyundai Marine back in 2021 and remains the company’s second-biggest shareholder even after its partial stake sale. HD Hyundai Marine is majority-owned by HD Hyundai Heavy Industries.

The IPO raised 742 billion won, making it South Korea’s biggest listing since LG Energy Solution, LG Chem’s electric vehicle battery unit, raised 12.75 trillion won in early 2022—the country’s largest ever.

Based in the southern port city of Busan, HD Hyundai Marine plans to use its IPO proceeds to build ports and warehouses, and to fund acquisitions, among others. The company, spun off from HD Hyundai Heavy Industries in 2016 as part of a group restructuring, specializes in maintaining and repairing ships and engines.

For the fiscal year 2023, HD Hyundai Marine reported that revenue rose 6% year-over-year to 1.1 trillion won, while net income increased 26% from the previous year to 143 billion won. Investors are optimistic that the growing number of environmental regulations will push shipping firms to adapt their fleets to be greener and boost demand for HD Hyundai Marine’s retrofitting services.