Korea's top mobile game Odin creator Lionheart eyes IPO in H2

Lionheart Studio Corp., South Korea’s leading game developer behind the mobile game Odin, has begun the process to go public with its July 22 preliminary review application for a listing on the junior Kosdaq bourse.

Aiming for more than 4 trillion won ($3.1 billion) in corporate value via the IPO, the firm has selected Korea Investment & Securities Co. and JPMorgan as lead managers and NH Investment & Securities Co. and Goldman Sachs as co-managers.   

The game developer was valued at around 4 trillion won as of end-June when Kakao Games Corp., via its European affiliate, acquired an additional 30.37% stake for 1.2 trillion won. 

Kakao Games, a game publishing unit of Korea's web service giant Kakao Corp., is the largest stakeholder of Lionheart with a 54.95% stake. Kim Jae-young, founder and CEO of Lionheart, holds a 34.67% stake. He also owns 2.87% of the Kosdaq-listed Kakao Games.

Founded in 2018, Lionheart launched Odin: Valhalla Rising in June 2021.

Odin is one of the most popular massively multiplayer online role-playing games (MMORPGs) in Korea, backing Lionheart to quickly emerge as the country’s major game developer. Kakao Games is the distributor of Odin.  

The game developer posted 232.5 billion won in sales and 215.3 billion won in operating profit in 2021, respectively. The operating profit exceeded another Korean major game developer Netmarble Corp.’s 151 billion won.

Lionheart's IPO could be affected by the recently sluggish stocks of domestic gaming firms. Parent company Kakao Games' shares hit a 52-week low of 46,100 won on June 23, a 60.3% drop from its 52-week high of 116,000 won on November 17, 2021.

Two other Kospi-listed gaming companies, Krafton Inc. and NCSOFT Corp., also hit their 52-week low on July 1. Krafton’s stock closed at 212,500 won on the day, a 63.4% drop from the 52-week high of 580,000 won on November 17, 2021. NCSOFT’s stock ended at 347,500 won on July 1, a 60% plunge from the 860,000 won of August 20, 2021.

Kakao Games shareholders’ agreement on the listing plan will be also a critical factor for the IPO. Kakao Games’ share could be diluted by the listing of Lionheart, which is estimated to account for 60-70% of the parent company's sales and operating profits.

Among the other Korean firms targeting a Kosdaq listing this year is W-Scope Chungju Plant Co., a lithium-ion secondary battery separator maker. With Korea's auto parts supplier Halla Holdings Corp. as a minority shareholder, it is aiming for 3 trillion won in corporate value via an IPO in August.   

Write to Seok-Cheol Choi at dolsoi@hankyung.com
Jihyun Kim edited this article.