Big Fish Coming... A Great Market for IPOs in the Second Half of the Year

Kakao Pay Passes Preliminary Listing Review
Kakao Bank Subscription on July 26-27
Crafton Also Expected to Go Public in Late July to Early August

[Asia Economy Reporter Song Hwajeong] As major initial public offerings (IPOs) begin their listing schedules one after another this month, the IPO market heat in the second half of the year is already heating up.

According to the Korea Exchange on the 29th, Kakao Pay passed the preliminary review for listing the day before. Since the review was approved, it is expected that if the securities registration statement is submitted immediately and the public offering process begins, listing could be possible as early as August. Kakao Pay was spun off from Kakao in April 2017 and launched as a fintech (financial technology) specialized subsidiary. Last year, its separate operating revenue was 245.6 billion KRW, and net loss was 17.2 billion KRW. The accumulated number of subscribers reached 36 million, and transaction volume recorded 67 trillion KRW. Currently, Kakao holds a 55% stake as the largest shareholder.

Kakao Bank also submitted its securities registration statement the day before, officially entering the public offering process. The desired public offering price was proposed at 33,000 to 39,000 KRW per share. The company's valuation based on market capitalization is between 15.7 trillion and 18.5 trillion KRW. The number of shares to be offered is 65.45 million. After conducting demand forecasting on the 20th and 21st of next month to finalize the public offering price, general subscription will be held over two days on the 26th and 27th. It is scheduled to be listed on the KOSPI in early August.

Jeon Baeseung, a researcher at Ebest Investment & Securities, analyzed, "The public offering price did not deviate significantly from market expectations and was formed significantly lower compared to the over-the-counter price in the 90,000 KRW range," adding, "It seems that, conscious of overvaluation controversies, the valuation applied was not based on platform companies but on the traditional financial stock price-to-book ratio (PBR) method, and the desired market capitalization was set at a PBR of 3.1 to 3.7 times relative to total capital after listing." Jeon also noted, "However, this is still a considerable premium compared to listed bank holding companies, and whether a higher value than the public offering price is maintained will depend on the success of establishing a differentiated business model from existing banks."

Krafton previously passed the listing review on the 11th. It submitted the securities registration statement on the 16th and initially planned to conduct the public subscription on July 14-15 and list on the 22nd, but the Financial Supervisory Service requested a correction to the securities registration statement. If the corrected registration statement is submitted this week and the listing process continues, it is expected to be listed at the end of July or early August.

Additionally, Hyundai Heavy Industries and LG Energy Solution are awaiting the results of their listing reviews. Hyundai Heavy Industries submitted its application on May 6, and LG Energy Solution on June 8.

With major IPOs lined up one after another, the enthusiasm for public offering investments is expected to heat up the market this summer. In the first half of this year, a total of 52 companies (excluding SPAC mergers and transfers) were newly listed on KOSPI and KOSDAQ. In the first half of last year, the number of newly listed companies was only 18 due to the impact of COVID-19. The total amount raised in the first half reached 5.7774 trillion KRW, and the combined market capitalization at listing was 29.3082 trillion KRW.

This content was produced with the assistance of AI translation services.