K Car, Lowered IPO Price and Even Cheaper Opening Price... Attractive Exclusive Used Car Platform

[Asia Economy Reporter Hyungsoo Park] K Car is trading below its IPO price of 25,000 KRW on its first day of listing. Despite setting the IPO price at the lower end of the expected range, the opening price was formed lower than the IPO price.

As of 9:51 AM on the 13th, K Car is trading at 24,300 KRW, up 8.0% from the opening price. K Car started trading at 22,500 KRW, which is 10% lower than the IPO price.

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

Last year, K Car recorded sales of 1.3231 trillion KRW and an 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 online channels 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, a ‘24/7 instant payment system’, and ‘same-day delivery’.

Earlier, K Car conducted a demand forecast targeting domestic and international institutional investors over two days from the 27th to the 28th, resulting in the IPO price being set at 25,000 KRW. The IPO price was decided at a 27% discount compared to the lower end of the expected band of 34,300 KRW. The number of shares offered was 13,464,231, reducing 20% of the existing outstanding shares.

Jongseon Park, a researcher at Eugene Investment & Securities, expressed expectations that "K Car will continue stable growth based on its exclusive domestic online and offline network."

He added, "As of July this year, it has an offline network within one hour of 41 major cities nationwide," and "it performs fulfillment center functions including inspection, merchandising, marketing, delivery, and refunds."

Furthermore, he emphasized, "By improving operational efficiency through data-based pricing solution (PMS) and UCMS (Used Car Management System), profitability is being enhanced."

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