Model Solution CEO Woo Byung-il, center, poses with representatives of the country’s brokerage institutions at the Seoul exchange after the company goes public on Oct. 7. Photo courtesy of Model Solution

Hankook & Company Group unit vies to expand capabilities with IPO

Model Solution, a subsidiary of Hankook & Company Group, went public on Oct. 7 to become the first Korean prototype firm to be listed on the tech-heavy Kosdaq.

Through the initial public offering, Model Solution said that the company would accelerate the development of its next-generation growth engines.

The outfit got off a solid start in the Seoul bourse as its share price jumped more than 10 percent in the morning session on Day 1.

Founded in 1993, Model Solution is a total solution provider that serves the entire product development stage.

Included in its businesses are design to prototypes, precision computer numerical control (CNC) machining, tooling & molding, and contract manufacturing for various sectors, like electronics, medical devices, consumer goods, robotics, and automotive.

The company has been taking its first official steps to go public by passing the preliminary review in July after submitting a registration statement and forecasting demands from investors.

In specific, the demand forecast conducted on Sep. 19 and 20 recorded a high competition rate of 1,725.78 to 1, demonstrating the company’s popularity.

The competition among non-institutional investors also heated up on Sept. 26 and 27. The IPO was oversubscribed by 1,514.8 times, and subscription deposits totaled 5.11 trillion won ($3.6 billion).

As a result, the issue obtained the title of a blue-chip stock. The final public offering price was set at 27,000 won, the upper end of the issued price band, to keep market-friendly conditions.

Approximately 27 billion won ($19 million) was raised in total.

Model Solution provides a one-stop business solution to help customers realize various ideas by implementing top-quality technology.

By providing its unique color, material, and finish (CMF) design and adhering to its rapid production process, the company has served more than 500 global customers, including Google, Amazon, Tesla, Samsung, and Hyundai Motors.

Solid business portfolios

Since being acquired by Hankook & Company in 2018, Model Solution has shown continuous growth in sales to record an average operating profit margin of 14 percent until last year.

It logged 61.1 billion ($42 million) in sales last year for an operating profit of 8.9 billion won ($6.3 million), up 9.8 percent and 32.1 percent from a year ago, respectively.

During the first half of this year, its turnover amounted to 32.2 billion won ($23 million).

Through the IPO, Model Solution plans to secure future growth engines in order to make a quantum leap leading the industry as an innovative manufacturing company.

The company plans to first develop its own hardware brand. As a part of such efforts, the AR head-mounted display (HMD) prototype that was developed in the previous year will undergo pilot testing to be mass-produced and commercialized by 2023.

Furthermore, its holding company Hankook & Company said that it would provide additional support by making additional investments through its accelerator program in the case Model Solution discovers innovative companies to collaborate with.

Meanwhile, to build upon the momentum, Model Solution has established a new integrated operation center in Ojeong Industrial Complex in Bucheon, Korea.

This is expected to help increase the company’s business scope as a total solution provider and respond to contract manufacturing demands from global customers.

Model Solution has also created a new business division, the contract manufacturing business division, to oversee contract manufacturing of low-to-medium volume production of finished products.

It started operating in March in the new Bucheon integrated operation center. Since July, the tooling & molding division has also been transferred to the new Bucheon center to start operating.

In the first quarter of 2023, the company plans to complete the transfer of the precision CNC machining division. This sequential transfer is expected to create synergy with all business divisions.

Through this expansion, Model Solution will now operate a total of three business locations and one global sales base.

This includes the existing two operation facilities for prototype production in Doksan-dong, Seoul, and the integrated operation center in Bucheon for tooling & molding and contract manufacturing, and the North American sales base located in Silicon Valley, U.S.

In addition, the company is planning the establishment of new sales bases in the East of the U.S and Germany to increase its presence in the global market.

“In order to stay ahead of industry trends, we will continue to expand its business portfolio by employing new business models and adopting the latest technologies, such as AR to the products,” Model Solution CEO Woo Byung-il said.

“We are also preparing ourselves to secure customers in new fields such as medical devices, robotics, and aerospace.”