Jeil Holdings, the investment holding company of Korea’s leading poultry processing Harim Group, will go public on the Kosdaq market next month, marking the first IPO for a pure holding company in the secondary trading board of Korea Exchange (KRX).

According to sources on Monday, Jeil Holding will determine its IPO price after a book-building procedure due on June 12-13. The procedure will be led by KB Investment & Securities and Shinhan Investment. The desired IPO price band is between 20,700 won and 22,700 won ($20) per share that could set its market value of up to 1.6 trillion won.

Jeil Holdings owns a 68.1 percent in Harim Holdings, 47.9 percent in Harim, 50.9 percent in recently acquired Pan Ocean and 56.3 percent in Pharmsco among others. Pan Ocean and Pharmsco and two others controlled by Jeil Holdings are listed on the Kospi market, while Harim and Harim Holdings shares are traded on the Kosdaq.

Jeil Holdings has shown strong top-line and bottom-line figures driven by stable earnings from subsidiaries. Sales of Jeil Holdings nearly doubled from 2014 to 6.2 trillion won on a consolidated basis last year. Operating profit soared from 228 billion won to 451 billion won in the same period. A holding company is now catching attention from investors on expectations their corporate governance will improve during the new administration that underscores its commitment to transparency and the upholding of shareholders rights.

Even with the IPO price set at the high end of 22,700 won, the company’s price-to-book ratio would be approximately 0.6 times over the market cap of 1.6 trillion won, which means its relatively low corporate value can appeal to investors. Jeil Holdings’ expected PB ratio is lower than that of other holding companies like LG (1.04), GS (1.0) and Doosan (0.98).

“The IPO price band was introduced with a considerable discount to the value of Harim Group that could continue growth on a vertically integrated livestock business model. The company deserves to receive attention from investors for its synergy potential,” said an official at KB Investment & Securities responsible for the IPO management.

Market watchers say that Jeil Holdings are likely to be merged with Harim Holdings, a mid-level holding firm in the group, to simplify corporate governance.

By Hong Jang-won

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