K Car, Offering Price 25,000 Won... 27% Discount Compared to Lower End of Desired Offering Price

[Asia Economy Reporter Hyungsoo Park] K Car has set its public offering price at 25,000 KRW.

K Car announced on the 30th that it finalized the public offering price after conducting demand forecasting targeting domestic and international institutional investors over two days from the 27th to the 28th. The total public offering amount is 336.6 billion KRW, and the market capitalization based on the public offering price is 1.2 trillion KRW.

The public offering price was decided at a 27% discount compared to the lower end of the desired band of 34,300 KRW. The number of shares offered is 13,464,231. The existing old shares volume was reduced by 20%.

A total of 361 domestic and international institutional investors participated in the demand forecasting, recording a competition rate of 37 to 1. Among the institutional investors who participated, 11.4% were foreign institutional investors.

An official from NH Investment & Securities, the lead underwriter, explained, "Due to the recent public offering market conditions, a price reflecting appropriate value did not emerge," but added, "Participating institutional investors highly evaluated K Car's platform capabilities and the structural growth potential of the used car market."

He continued, "Many long-term investors, including sovereign wealth funds, participated from overseas," and added, "They highly valued K Car's established position in the domestic used car market and its stable and high growth potential."

Regarding the decision on the public offering price, he explained, "It was decided in consultation with the issuer to maximize investment demand and to consider a stable stock price trend after listing."

K Car is the number one used car platform company in Korea. Last year, it held an 80% share of the domestic online used car market. K Car operates the entire process from used car purchase, inspection, sales, to after-sales service directly, building an integrated online and offline platform.

Last year, K Car recorded sales of 1.3231 trillion KRW and operating profit of 37.6 billion KRW, increasing by 11.6% and 29.1% respectively compared to the previous year. In the first half of this year, sales increased by 39.8% year-on-year to 910.6 billion KRW, and operating profit rose by 131.8% to 38.5 billion KRW.

Performance improved as the online channel grew. Online sales, which were only about 200.3 billion KRW in 2018, grew to 421 billion KRW last year. K Car is pioneering the online used car sales market by introducing industry-first services such as the ‘3-day refund policy’ allowing 100% refund on used cars, the ‘instant payment system’ available 24/7, and ‘same-day delivery’.

The public offering funds will be invested to strengthen e-commerce competitiveness with goals including ▲expanding offline networks ▲enhancing online assets ▲advancing price information services.

Jung In-guk, CEO of K Car, said, "Through the listing, we will make a leap forward based on K Car’s differentiated integrated online and offline platform and trustworthy certified direct used car business model to become a continuously growing company."

K Car will enter the KOSPI market on the 13th of next month. The lead underwriters are NH Investment & Securities and Goldman Sachs. The underwriting group includes Daishin Securities, Samsung Securities, and Hana Financial Investment.

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