—Lastly, securities news, today’s market conditions.
They say the late wind is the fiercest; that a thief who learns late doesn’t notice the day break... and that same belated craze is sweeping the IPO market. HBF Foods, which recently completed its initial public offering, has rapidly emerged as a major IPO contender, drawing the attention of many investors.
It began three days ago, during a private corporate briefing. After the briefing ended, KJ Foods announced its intention to purchase a stake.
KJ Foods stated its reason for investing, saying, “HBF’s research team consists of talents even foreign companies covet,” and, “Cultured meat is an issue directly tied to food security, and in that regard its potential is limitless.” The contract, concluded in the form of a block deal, is known to have been bid at roughly 20 billion won for a 20% stake.
And that is not the only favorable factor. Many investors are paying attention to HBF’s shareholding structure.
HBF is a rare case among venture investment companies in that the pension fund’s stake exceeds a majority. Although the pension fund disposed of a 10% stake through a block deal, it still holds over 40% and remains listed as the largest shareholder.
Accordingly, Daehan Asset, the lead underwriter, announced that it had finalized the offering price at 9,500 won and would proceed with subscriptions next Monday and Tuesday.
Will the day come when Korea, too, becomes a livestock industry powerhouse?
It still seems too early to be optimistic.
Amid the sudden cultured meat craze, there are no small number of voices expressing concern.
This afternoon, Hwashin Securities’ IPO analysis team diagnosed the current situation as “overheated” and urged investors to exercise caution.
Hwashin Securities warned, “It is true that HBF’s research achievements are remarkable,” but added, “Optimism is dangerous, given that the production cost of cultured meat has yet to be lowered below that of conventional meat.” In particular, it assessed that “with commercial distribution of cultured meat not yet institutionally approved, nothing can be said with certainty at this point.”
As Hwashin Securities analyzed, there are many mountains our cultured meat research team must overcome.
Accumulated deficits, production costs, the possibility of commercial distribution... each and every one of them is a difficult mountain to climb.
In today’s stock market report, we will take a closer look at the truths and falsehoods surrounding cultured meat.
For more details...
*
“What was the ratio again?”
“It picked up momentum at the end and finished in the four digits. Exactly 1,031 to 1.”
“And the shareholding ratio?”
“We only disposed of 10% through the block deal, and the only shares released into the market were Professor Park’s. Assistant Manager Lee said we must not dispose of even a single share from this stake.”
“Well, of course he did. Of course.”
The day after HBF’s listing.
The division head let out a hollow laugh as he watched the stock price, with long bullish candles shooting upward one after another.
It was hard to believe. Had a livestock IPO ever set such a record in Korea? Despite countless concerns, HBF had successfully settled onto KOSDAQ after breaking through a subscription competition ratio of one thousand to one.
But the miracle did not end there.
HBF, which hit the upper limit on its first day of listing, hit the upper limit again today, seizing even the title of “ddasang.” Considering that all of this had happened after they had grabbed the research team by the hair and brought them back to Korea right before signing a contract with Tysun, there was no way to explain it except as a miracle.
“Where is Assistant Manager Lee now?”
“He didn’t come to work yesterday or today. He went on a business trip to Seoul.”
“To Professor Park’s research team?”
“Yes. Shall I call him in?”
“No need. If he’s produced investment results like this, he deserves to slack off for two days.”
“Haha.”
The division head laughed.
When he had received that call from America that day asking for 20 billion won, it had been the right decision to hand it over at once. The pension fund’s initial investment of 20 billion won had already more than paid for itself. Considering that ninety-nine out of a hundred venture investments failed, this was truly nothing short of a unicorn.
“Chief Oh, investment really is all about timing. If Tysun had pushed an MOA at them that day instead of an MOU, this miracle would never have happened.”
“I’m not so sure. The Assistant Manager Lee I know would have brought them back even if he had to pay the penalty fee himself.”
“What?”
“I don’t know why, but Assistant Manager Lee had absolute conviction in cultured meat. In some ways, even more than Professor Park.”
Every time Chief Oh spoke with Sejun, he felt a strange sense of incongruity. That faint madness he had sensed since the SB incident until now... and recently, he realized why he kept feeling that sense of strangeness from him.
He was not predicting market conditions. He was certain of them. Chief Oh had no idea where that confidence came from, but every small turn of phrase and gesture from the man was always filled with certainty.
“So that’s why you always keep him close? Afraid he’ll transfer somewhere else if you don’t listen to his reports?”
“What choice do I have? His predictions are always right. Haha...”
“Still, don’t put too much faith in him. There have been plenty of guys in this field called investment ghosts. A whole truckload of them were flying high before collapsing in a single blow.”
“Yes. There’s a truckload of people in this world who predicted the IMF crisis, and people who predicted subprime. I’ll always be careful.”
They said that, but smiles never left either man’s face.
Truly, things could not be better. The prices of raw materials they had recently invested in aggressively had skyrocketed, and gold had risen by 20%. Conversely, U.S. Treasury bonds, which they had cut loose early, were still wandering in the abyss. When everyone else was in a recession and only they were booming, it felt as though they had become twice as rich.
“By the way, I hear your investment performance has been good lately?”
“Yes. What we sold keeps falling, and what we bought is going through the roof.”
“At this rate, won’t we rank first in sovereign wealth fund returns this year?”
“We just might. Haha!”
“Hahaha...”
But that laughter did not last long.
[Failure! Another failure! Yet another failure!]
[Will U.S. prices rise all the way to Mars? CPI flashes red even with the benchmark rate at 4.0%!]
[Chairman Pavil silent for a week...]
[Professor Kevin of Harvard University: “Cowards, step aside. The Fed’s price policy has completely failed.”]
As the two men looked at the CPI index announced yesterday and the headlines of American economic journals, their expressions hardened again.
A 4% benchmark interest rate... The Fed had administered drastic measures several times, yet American inflation still had not been brought under control.
Could this possibly be a warning sign of a second subprime crisis...
*
—May the Communist Party live forever!
—Long live! Long live! Long, long live!
The Two Sessions, China’s greatest political event.
Among them, once the National People’s Congress, which decides major state affairs, came to an end, every Party member held up their Party membership card and shouted long live.
Out of 1.5 billion people, only 3,000. The state councilors and generals gathered here were only those whose loyalty to the Party had been thoroughly verified.
Was that why? All major state affairs were decided smoothly without opposition, and the future of China announced today was filled entirely with rosy prospects.
“C-Chairman of the Standing Committee. Please, not this. Anything but this.”
But wherever one goes, reactionaries are bound to exist.
The Chairman of the Standing Committee glared at the director of the Statistics Bureau, who had followed him all the way to his office.
“Director Li Xiong. Did you not understand what I meant?”
“No, I understood... But this is truly a serious problem, so I have come to petition you like this.”
“You’re quite the man for borrowing trouble. You’re not cut out for great things.”
The Chairman of the Standing Committee jerked his chin toward those around him with displeasure in his eyes.
Once the bodyguards withdrew and only the two of them remained, the Chairman of the Standing Committee asked,
“You intend to bring up that matter from earlier again, don’t you?”
“...It is truly serious.”
“What is so serious?”
Director Li Xiong held out the documents, prepared to lose his head.
“This is the current state of real estate investigated by our National Bureau of Statistics. Unsold housing rates are soaring in every region except major cities like Beijing, Shanghai, and Guangzhou.”
“Well, the Party expected that to some extent, didn’t we? When an economy grows rapidly, the population naturally reorganizes around major cities.”
“...The problem is that the companies cannot hold out.”
“What?”
“These are the current financial statements of construction companies such as Pengda, Wangke, and Bigui. If the unsold units are not resolved, their finances have hit rock bottom to the point where it would not be strange for them to go bankrupt immediately!”
The Chairman of the Standing Committee’s expression crumpled.
During the era of zero interest rates, China had been swept up in a real estate frenzy just as much as Korea. Considering GDP per capita, it would not be an exaggeration to say China’s frenzy surpassed Korea’s.
Dongcheng, Xicheng, and Haidian Districts, considered China’s top school districts, had risen vertically at a rate far surpassing China’s economic growth. As prime areas rose, mid-tier areas, lower-tier areas, and provincial regions followed suit, and construction companies drove in shovels at the mere sight of land.
Had America perhaps foreseen even this? Had this series of events been an elaborate anti-China containment strategy by the CIA, the State Department, and the Fed?
Of course not. They would not destroy their own prices just to bankrupt Chinese construction companies... But it was undeniable that high interest rates originating from America had become an economic nuclear bomb for China.
As the Fed’s benchmark rate soared, the People’s Bank of China had no choice but to raise rates as well, and that had become the detonator of China’s current real estate market.
As a result, all five of China’s largest construction companies, which had driven in shovels at the mere sight of land, were facing liquidity crises. The three major construction companies, including Pengda, Wangke, and Bigui, were effectively in a state of capital impairment, their sources of funding completely dried up.
But the outlook ahead was even darker. Apartments already built were going unsold day after day... To resolve their funding crisis, they needed to sell even those, but China’s current real estate prices had been cut in half.
“It’s dangerous... truly dangerous! If the Fed raises interest rates again this time, our real estate market will shrink even further.”
“So?”
“Please report to the Chairman’s office at once and give us countermeasures. We need measures at the national level!”
The Chairman of the Standing Committee stared at Director Li Xiong.
“Director Li Xiong. I’m terribly sorry, but the Chairman’s office has no time to concern itself with such trivial matters right now. You truly know too little about central politics.”
“...Pardon?”
“An internal issue, shall we say? Mm... they are somewhat busy. Just understand it that way.”
“Then how are we supposed to resolve this problem?”
With an indifferent expression, the Chairman of the Standing Committee put a cigarette in his mouth.
Then he looked out the car window.
“The great Comrade Mao Zedong once said... or was it Stalin? In any case.”
“...”
“He said one man’s death is a tragedy, and the death of a million is a statistic. What do you think that means?”
“That when numbers grow large, people eventually become numb...”
“No, wrong. It means statistics are that bad.”
“...Pardon?”
“If you don’t compile statistics, no one knows how many people died. Am I wrong?”
The Chairman of the Standing Committee was always like this. He would quote some old anecdote, then interpret it however he pleased.
But raising an objection before him would be foolish. China had currently returned to a system of absolute power.
If the Party designated sparrows as bad birds again, the entire people would have to go around exterminating sparrows.
“Politics cannot always be honest. Sometimes, keeping one’s mouth shut is the best policy.”
“...”
“I really am sorry about this. Of all times, the Chairman’s office happens to be busy with internal matters... I’d like you to play your part in that issue.”
The Chairman of the Standing Committee watched the director of the Statistics Bureau’s firmly shut mouth, then crushed out his cigarette.
“You may go.”