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According to The Korea Economic Daily Global Edition,

South Korea’s virtual reality (VR) and augmented reality (AR) companies are rushing to be listed on Kosdaq, as betting on metaverse stocks has become a trend among investors worldwide.

Metaverse, a compound word of “meta” and “universe”, is a shared virtual space that converges virtual and physical realms to realize people’s imagination.

According to banking sources on Mar. 30, an AR company MAXST Co. has filed for a preliminary screening by the Korea Exchange as a part of the IPO process.
MAXST Co. in 2012 had developed the country’s first AR software development kit, which the company uses to provide industrial AR solutions to companies like Samsung Electronics Co., Daewoo Shipbuilding & Marine Engineering Co. and KT Corp. The company's strategic investors include Hyundai Motor Co. and Mando Corporation.

A typical screening takes around 45 working days but may be delayed due to the recent rise in the number of applications. The AR company expects listing on the local bourse within the second half of 2021, with Hana Financial Investment Co. as its underwriter.

Another company that is drawing market attention is NP Inc., the content affiliate of WYSIWYG Studios Co., which also targets Kosdaq listing within this year through a merger with Samsung SPAC 2. NP has also filed for a preliminary screening by the Korea Exchange.

NP last year has established XON Studios, Korea’s first virtual production studio, which uses VR and AR technologies to produce virtual environment content.

One of NP’s major projects is the global e-sports festival World Cyber Games (WCG) 2020, which used the company’s VR and AR technologies for contactless broadcasting to surpass more than 650 million views worldwide.

4by4 Inc., a VR-based visual content company, also eyes public listing within the second half of 2021, with Daishin Securities as the underwriter. The company is currently producing a VR content that offers an experience of royal tombs of the Joseon dynasty.

GIANTSTEP Inc., which made a recent debut on Kosdaq on Mar. 24, also uses VR technologies to produce visual content. The company has recently worked together with Naver Corp. to produce a contactless concert using its extended reality (XR) technology, which combines the features of VR and AR.

GIANTSTEP made a strong debut on the local stock market on its first day of trading, by opening at double its IPO price and closing at the daily climb limit.

Financial analysts project that Kosdaq will continue to see more IPOs of VR and AR companies.

“While the global digital content industry is expected to annually grow by 11% from 2017 and 2022, AR- and VR-based content market will annually grow by 68.5% during the same period. The spread of contactless culture is driving the industry growth,” said Samsung Securities Analyst Choi Min-ha.

Others also point out that not all IPOs are likely to succeed, given that the market is still nascent.

“Most AR and VR companies are likely to apply for special listing without tangible results on performance. Return on investment may lag behind expectations if the industry growth is slower than current projections,” said an investment banking source.

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Source: The Korea Economic Daily Global Edition (Mar 31, 2021)

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