The 'Kabang Sell Report' That Launched an Ant Carpet Bombing Turns Out to Be Right After All

BNK Report from 2 Years Ago Revisited
Target Stock Price and PBR Almost Identical
"There Was Much Dissatisfaction Then... I Was Immature"

About two years ago, a securities firm report that issued a 'sell' recommendation during KakaoBank's (K-Bank) initial public offering (IPO) is gaining attention among retail investors. This is because it not only predicted K-Bank's downward trend after listing but also accurately matched the target stock price.

The report that became a hot topic among netizens on the 15th is BNK Investment & Securities' "KakaoBank is a Bank!!!" report published on July 26, 2021. The title, which unusually attached three exclamation marks in a row to emphasize that K-Bank is a 'bank,' had already attracted attention at the time.

K-Bank was listed on the KOSPI market on August 6 of that year. The final public offering price was 39,000 KRW. Although there were some criticisms that it was overvalued compared to other large banks already listed, K-Bank was able to achieve a high valuation by emphasizing that it was not just a simple 'bank' but a 'financial platform growth stock.'

The BNK Securities report title implied that K-Bank is just one of the financial companies, and considering the company's financial situation, the initial target price was unreasonably high.

KakaoBank Photo by Yonhap News

The report focused on the excessively high price-to-book ratio (PBR, the ratio of stock price to book value per share) compared to peer banks. At that time, K-Bank's IPO price of 39,000 KRW corresponded to a market capitalization of 18.5 trillion KRW, and the PBR relative to the IPO price was 3.3 times, which was criticized as an "excessively high premium compared to listed banks."

Accordingly, the report considered an appropriate valuation for K-Bank to be around a PBR of 2.0 times. The target price per share was also set at 24,000 KRW. As of 1 PM on the 15th, about two years after the report was released, K-Bank's stock price is trading around 24,200 KRW. The PBR is 1.96 times, almost matching the ratio initially suggested in the report.

Netizens reacted with comments such as, "It hit the mark like a sniper. K-Bank's current stock price is converging exactly to the target price at that time," "The analyst was right," and "If I had read the report more carefully, I wouldn't have suffered losses. I'll be more thorough in reading reports from now on."

One netizen recalled the atmosphere of the investment community during K-Bank's IPO, pointing out, "There were many complaints from retail investors that K-Bank would have succeeded in a 'double jump' if it weren't for this report, but looking back now, that was immature talk."

In fact, on the first day of the IPO, K-Bank's opening price was 53,700 KRW, 38% higher than the IPO price. Afterward, K-Bank peaked at 91,000 KRW on August 20, 2021, and then repeatedly plunged. Last year, the BNK report was 're-evaluated' among retail investors as having "foreseen the future."

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