[IPO Spotlight] Inka Geumyung Service Nears KOSDAQ Transfer... Highlighting Platform Innovation and Solid Performance

Choi Byung-chae, CEO of Inka Financial Services (third from the left)

[Asia Economy Reporter Park Jihwan] Corporate-type insurance agency (GA) Inka Financial Services is moving from the KONEX market to the KOSDAQ market. The funds raised will be used to promote the development of an insurance platform and improve the financial structure. Inka Financial Services also expressed its ambition to open an era of 1 trillion KRW in sales, three times the current level, within five years after listing.

According to the financial investment industry on the 7th, Inka Financial Services is conducting a general subscription from today until the 8th. In the demand forecast for institutional investors conducted last month, it experienced sluggish performance due to the ongoing stock market adjustment since the beginning of the year. A total of 267 domestic and foreign institutions participated, recording a low competition rate of 13.69 to 1. The market capitalization after listing is expected to be around 92.5 billion KRW, and it is scheduled to be listed on KOSDAQ on the 16th.

Founded in 2007, Inka Financial Services is a leading domestic GA that compares and analyzes financial products sold by various insurance companies to provide insurance products suitable for consumers. As of the end of last year, it had 592 domestic branches and 11,113 planners, making it the largest corporate GA in scale. This is the third attempt for Inka Financial Services to enter KOSDAQ. After starting trading on KONEX in 2015, it attempted to list before 2018 but failed. In 2020, it also submitted a preliminary review application but voluntarily withdrew due to expectations that the IPO would not be successful.

Although it did not receive favorable evaluations this year due to the sluggish stock market situation, there is an analysis that its undervaluation attractiveness compared to growth potential will be highlighted in future stock price trends. Above all, the improvement in performance stands out. Inka Financial Services has an average annual sales growth rate of 26% over the past four years. Sales, which were around 151.4 billion KRW in 2017, jumped to 301 billion KRW in 2020. During the same period, operating profit increased from 1.9 billion KRW to 15.5 billion KRW, an average annual growth of 102%. As of the third quarter of last year, sales reached 233.8 billion KRW and operating profit was 15.7 billion KRW. Operating profit already exceeds the previous year's operating profit of 14.7 billion KRW. Kim Doha, a researcher at Hanwha Investment & Securities, said, "The core investment point of Inka Financial Services is the leverage structure of profit and loss," adding, "The structure where not only operating profit but also operating profit margin improves as sales increase is attractive."

Investment moves for the future are also swift. In 2019, it established a subsidiary called 'Ain' that provides AI chatbots, direct insurance premium comparison, and insurance claim services, focusing on the digital sector. A significant portion of the funds raised in this offering will be invested in the IT sector to develop a customer-tailored comprehensive consulting insurance platform. In the future, through the development of AI planners, it plans to provide services such as AI-based insurance product recommendations and coverage analysis.

A company official stated, "The funds raised this time will mainly be used for the development of technology to build the Ain online platform, and we plan to provide optimized customer solutions by linking online insurance coverage analysis with offline planners through this platform in the future," adding, "Some of the funds will also be used to improve the financial structure, such as repaying some borrowings."

The attractiveness of undervaluation is also highlighted. The public offering price of Inka Financial Services was set at 18,000 KRW, lower than the lower end of the desired price range (23,000 to 27,000 KRW) in the demand forecast conducted on the 24th and 25th of last month. Researcher Kim Doha said, "Based on the desired price band, the price-to-earnings ratio (PER) calculated by annualizing the cumulative performance of the third quarter of last year corresponds to 7.6 to 8.9 times," adding, "Compared to the PER of 12.5 times of Aplus Asset, the only listed GA, it is discounted by 29 to 40%."

Choi Byungchae, CEO of Inka Financial Services, said at a recent investor relations (IR) meeting, "We aim to have 30,000 planners within the next 3 to 4 years," and "We expect to achieve sales of 1 trillion KRW and net profit of 100 billion KRW five years after listing."

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