Tried KakaoBank IPO... Failed to Hit Double Price on First Day

Kabang Listed on the 6th
Failed to Open at Double Price
IPO Market Tension

[Asia Economy Reporter Hwang Junho] KakaoBank (Kabang), which was listed on the 6th, failed to achieve 'Ttah-sang' (opening price doubling followed by hitting the upper limit). Although it could not overcome the controversy over the overvaluation of the public offering price, it has emerged as the leading financial stock.

As of 9:25 a.m. that day, Kabang's stock price rose 14.90% from the opening price of 53,700 won to 61,700 won.

On that day, Kabang's opening price was set 37.7% higher than the public offering price of 39,000 won. To achieve Ttah-sang, the opening price should have been formed at twice the public offering price, 78,000 won, but it failed to surpass the Ttah-sang barrier from the start. The opening price is determined by receiving bids between 90% and 200% of the public offering price of 39,000 won from 8:30 to 9:00 a.m., just before the market opens on the listing day, at the price where buy and sell orders match.

On that day, Kabang's stock price fluctuated wildly. After the market opened, it dropped to 51,000 won but then surged to near the price limit at 68,000 won as buying volume poured in. Meanwhile, trading exploded. Within one hour of the market opening, the trading volume exceeded 29 million shares, and the trading value surpassed 1.7 trillion won.

Although Kabang failed to achieve Ttah-sang, it has become the leading financial stock. Currently, Kabang's market capitalization is 29 trillion won, far surpassing KB Financial's market cap of 22 trillion won, which previously held the leading position. It ranks 13th overall on the KOSPI, following POSCO. Before listing, experts evaluated Kabang's market cap as 40 trillion won if viewed as a platform company, and 20 trillion won if viewed as a bank. The early trading price on that day was formed between the valuations of a platform company and a bank.

[Image source=Yonhap News]

Experts' evaluations were not higher than the current stock price. Ji-young Kim, a researcher at Kyobo Securities, stated, "Applying the valuation formed by expectations of digital finance growth to KakaoBank, reflecting the value (PBR 4.0 times) that digital finance previously received, the target price for KakaoBank is estimated at 45,000 won."

Investors who pinned their hopes on Ttah-sang expressed regret. If Kabang had succeeded in Ttah-sang, the stock price would have risen to 101,000 won, yielding a profit of 62,000 won per share.

With Kabang also failing to achieve Ttah-sang, the myth of huge profits from mega IPOs is rapidly fading. Since SK Bioscience in March, no major IPO has succeeded in Ttah-sang. Following SKIET's failure in April and Kabang's failure, expectations for mega IPOs in the second half are likely to decline further.

In the second half of this year, mega IPOs such as HK Innoen, which manufactures the hangover relief drink 'Condition', and Krafton, the creator of Battlegrounds, will proceed one after another. Krafton recorded a disappointing performance in the general subscription with a deposit of 5.0358 trillion won and a competition rate of 7.79 to 1. The employee stock ownership subscription rate was only 20.3%, leading to early predictions of a box office failure.

Seungdoo Na, a researcher at SK Securities, forecasted, "Although there are still mega IPOs to come in the remaining five months and abundant market liquidity is maintained, the boom is expected to continue. However, investors' selection of good stocks will intensify depending on the business conditions of newly listed companies and the growth momentum of their upstream industries."

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