Yuanta Securities' lead underwriting competency faces scrutiny as BigWave Robotics, for which it serves as lead underwriter, repeatedly amended its securities registration following Financial Supervisory Service (FSS) requests. BigWave Robotics submitted its initial securities registration in May and subsequently received two correction requests from the FSS, which required supplementation of performance estimates, comparable company selection, valuation methodology, and business plan risks. The amendments resulted in changes to comparable companies, valuation multiples, and the offering price range, raising questions about the thoroughness of initial due diligence as Yuanta accelerates its IPO business expansion.
BigWave Robotics Submits Amended Securities Registration With Revised Valuation
BigWave Robotics recently submitted an amended securities registration and resumed its KOSDAQ listing process, with Yuanta Securities as lead underwriter and Mirae Asset Securities as co-underwriter. The company's comparable companies changed significantly through the amendment process. The initial registration listed Yujin Robotics, Robostar, T Robotics, and CMes Robotics as comparables. The amended registration retained only Yujin Robotics while adding Raon Robotics, Eugene Robot, and P&S Robotics - replacing three of the original four companies.
The valuation methodology maintained the Price-to-Sales Ratio (PSR) approach for the loss-making company, but the average PSR of comparable companies decreased from 18.51x to 16.19x. The per-share valuation before discount dropped from 36,574 won to 31,978 won. The offering price range was lowered from 22,000-27,000 won to 20,000-24,000 won, representing a 9.1% decrease at the lower end and 11.1% at the upper end. With the number of shares offered remaining at 2 million, the expected offering amount decreased from 44-54 billion won to 40-48 billion won.
The company and underwriting syndicate added a Price-to-Earnings Ratio (PER) valuation for investor reference, which produced an offering price range of 9,392-11,262 won - approximately half the actual offering price range. The amended registration included investment caution notices stating that the PSR-based offering price may be valued higher than the PER-based calculation.
Yuanta Securities Expands IPO Team to 30 Members
Yuanta Securities expanded its IPO organization to around 30 people early this year and set a goal of leading 5-7 listings annually. In March, the firm recruited experienced professionals to handle corporate valuation, due diligence, preliminary examination applications, and securities registration preparation. The firm participated in the KOSDAQ listings of Inventera and Cosmo Robotics this year, with combined offering amounts of approximately 44.6 billion won.
Yuanta Securities had limited lead underwriting activity since S&D in 2021. After serving as co-underwriter for CMes and participating in the TXR Robotics acquisition syndicate, the firm began expanding its IPO business in earnest this year. BigWave Robotics represents a key lead underwriting project as Yuanta expands its IPO market presence. Special listing cases require lead underwriters to evaluate company growth potential and business viability while presenting judgment rationale.
Industry Observers Question Initial Registration Standards
While BigWave Robotics is the legal filing entity for the securities registration and Mirae Asset Securities participated as co-underwriter, industry observers question whether the underwriting syndicate led by Yuanta Securities sufficiently verified comparable company selection and valuation rationale in the initial registration stage. FSS correction requests are standard review procedures for investor protection and occur even with large securities firms as underwriters. Correction requests alone do not definitively indicate underwriting competency issues.
However, this case involved replacement of most comparable companies along with reductions in valuation multiples and offering price range - differing in nature from simple explanation enhancements or typographical corrections. A financial investment industry official stated, "While rapidly expanding IPO organization and underwriting contracts is important, internal verification capabilities for due diligence, valuation, and registration preparation must be supported together. Given that comparable companies and offering prices changed significantly through corrections, it is necessary to examine whether the initial registration's completeness was sufficient."
FAQ
What changes did BigWave Robotics make to its securities registration?
BigWave Robotics changed three of its four comparable companies, with only Yujin Robotics remaining from the original list while adding Raon Robotics, Eugene Robot, and P&S Robotics. The average PSR of comparable companies decreased from 18.51x to 16.19x, and the offering price range was lowered from 22,000-27,000 won to 20,000-24,000 won.
How is Yuanta Securities expanding its IPO business?
Yuanta Securities expanded its IPO organization to around 30 people early this year and set a goal of leading 5-7 listings annually. The firm recruited experienced professionals in March to handle corporate valuation, due diligence, and securities registration preparation, and participated in the KOSDAQ listings of Inventera and Cosmo Robotics this year.
Why did the FSS request amendments to BigWave Robotics' registration?
The FSS required BigWave Robotics to supplement performance estimates, comparable company selection, valuation methodology, and business plan risks - elements that form the basis for offering price calculation. The company submitted two amended registrations following these requests.
