[IPO] Melcon, which broke into ASML's supply chain, sees 1741:1 subscription success... Accelerating response to next-generation EUV

Semiconductor equipment specialist Melcon has achieved successful results in its general public subscription for KOSDAQ listing. As investment in AI semiconductors and advanced processes continues to expand recently, investor interest in semiconductor equipment-related companies also continues.

The results of Melcon's general subscription, which took place from the 1st to the 2nd, showed a competition rate of 1741.48 to 1. The number of submitted subscriptions was 254,009, with a corresponding deposit of 6.6948 trillion won. This public offering, with Daishin Securities serving as the lead manager, was conducted through a new share issuance of the entire 2.5 million shares, of which 25%, or 625,000 shares, were allocated to general investors.

The company also recorded a high competition rate during the institutional investor demand forecasting held previously. In the demand forecasting conducted from the 16th to the 22nd of last month, 2,405 institutions participated and applied for a volume reaching 2.1 billion shares, with a competition rate calculated at 1136.84 to 1. As 99.44% of the requested quantity presented a price at or above the upper end of the desired band (10,700~12,300 won), the final offering price was confirmed at 12,300 won.

During the demand forecasting stage, the institutional investors' mandatory holding commitment application ratio was 36.07% based on quantity. However, as the final allocation volume for general institutional investors who committed to mandatory holding fell below the mandatory allocation standard by regulation, Daishin Securities plans to acquire an additional 25,000 shares, which is 1% of the public shares, and hold them for more than 6 months from the listing date.

Melcon will be listed on the KOSDAQ market on the 15th, following the deposit payment and refund on the 7th. Based on the offering price, the expected market capitalization is approximately 155 billion won, and the tradable volume immediately after listing is 4.346 million shares, which is about 34.5% of the total shares.

Melcon is a company that develops and produces environmental control equipment used in the photo (lithography) process among semiconductor front-end processes. Its flagship products are the THC (Temperature Humidity Control System), an ultra-precision temperature and humidity control device, and the XPS (Extreme Purifier System), an ultra-precision purification control system. The photo process is the stage of forming fine circuit patterns on a wafer, and as the process becomes finer, the importance of environmental control technology that precisely manages temperature, humidity, and pollutants increases.

The flagship product THC works in conjunction with the Track (photoresist coating and development equipment) in the photo process to control temperature, humidity, trace gases, and particles inside the equipment. After localizing equipment from Shinwa Controls in Japan, the company has expanded its response range from DUV (Deep Ultraviolet) such as KrF and ArF to EUV (Extreme Ultraviolet). Melcon has been supplying equipment to domestic and international semiconductor companies such as SK hynix, Samsung Electronics, and GlobalFoundries, and its domestic THC market share reaches 70.48% as of 2025.

Recently, the company has been expanding its business area with XPS while also responding to next-generation processes. XPS is equipment that supplies ultra-high purity dry air to ASML lithography equipment (Scanner) to remove various contamination sources. In October 2025, Melcon was registered as an ASML Qualified Supplier for the first time by a Korean company. Currently, it is developing and verifying THC to respond to High-NA EUV, a next-generation lithography technology, while also expanding the application range of its equipment to other semiconductor processes.

In overseas markets, the company is pursuing customer diversification. In 2025, it completed registration as a supplier for TSMC and ASML, and is negotiating the initial volume for a Taiwan fab with Micron. However, as of the date of submission of the registration statement, TSMC is negotiating the supply of evaluation equipment, and for Micron, the timing and scale of supply have not yet been finalized.

Due to its business structure, the high dependence on semiconductor facility investment and major customers is a risk factor. If customers reduce or delay investment due to a downturn in the industry, it could lead to a decrease in orders. In particular, the sales proportion of the top two customers, Samsung Electronics and SK hynix, increased from 65.5% in 2025 to 81.9% in the first half of 2026. Since THC is linked to TEL's Track and XPS is linked to ASML's Scanner, the company may also be affected by changes in the product roadmaps or supply policies of these equipment manufacturers.

Continuous technological response to next-generation processes is also a task. If products responding to High-NA EUV fail to pass verification at the time of the customers' new line construction, there is a possibility of being excluded from the supply to that line. Additionally, the dualization of customers' supply chains or the expansion of competitors' response to advanced processes may affect future market share and supply unit prices.

While performance shows volatility according to the semiconductor facility investment cycle, it has recently shown a clear recovery trend. Although both sales and operating profit decreased compared to the previous year in 2024, in 2025, sales increased by 66.5%, and operating profit also improved significantly.

Sales in the first half of this year also recorded 22.1 billion won, an increase of 28.7% compared to the same period last year, and the operating profit margin continued its upward trend, reaching 16.5% following 1.6% in 2024 and 14.7% in 2025. During the same period, the net profit was 4.4 billion won, which has already approached last year's annual performance (4.5 billion won). However, it is noted as an investment risk factor that since the proportion of fixed costs in selling, general, and administrative expenses is high, the fluctuation range of operating profit may increase when sales decrease.

Cash generation capabilities also improved this year. In the first half of 2026, consolidated operating cash flow recorded a net inflow of 8.8 billion won, surpassing last year's annual net inflow (2.3 billion won). Additionally, due to the impact of disposing of financial assets and other factors, a net inflow of 6.2 billion won occurred in investing activities, resulting in cash and cash equivalents of 27.1 billion won at the end of the first half, more than doubling from 12.1 billion won at the end of last year. Total liabilities amounted to 12.7 billion won, which is only 15.1% of total equity (84 billion won).

However, the inventory burden has increased due to preemptive raw material procurement in preparation for future shipments. At the end of the first half of 2026, inventory assets stood at 11 billion won, an increase of 51.5% from the end of last year, and the amount of raw materials used during the same period also increased by 101.2% compared to the same period last year, significantly outstripping the revenue growth rate. The company explained that this is procurement to respond to volumes scheduled for shipment in the second half, but if raw material prices rise or supply disruptions occur for some core components, it could lead to cost burdens.

Melcon will secure approximately 30.7 billion won in net proceeds through this public offering. Of this, 14.2 billion won will be invested in facility funds, such as expanding production and verification spaces and introducing test equipment for product development. Along with expanding production capacity, the company plans to expand development infrastructure to respond to next-generation processes such as High-NA EUV.

15.5 billion won has been allocated to working capital. Of this, 10.1 billion won will be used for technological advancement, such as developing products to respond to High-NA EUV and internalizing core XPS purification modules, while the remaining 5.4 billion won will be invested in expanding R&D personnel and overseas marketing/certification. In addition, 1 billion won will be used to repay borrowings, and the public offering funds are scheduled to be executed step-by-step from 2027 to 2029.