Skip to content
  • KOSPI 3133.17 +7.93 +0.25%
  • KOSDAQ 1035.43 -1.60 -0.15%
  • KOSPI200 410.71 +0.87 +0.21%
  • USD/KRW 1175.3 -6.40 -0.54%
  • JPY100/KRW 1,060.79 -10.66 -1.00%
  • EUR/KRW 1,377.45 -10.10 -0.73%
  • CNH/KRW 181.89 -0.30 -0.16%
View Market Snapshot

IPOs

KakaoBank becomes Korea's most valuable lender

Investors bet on KakaoBank's potential as a financial platform and its synergy with KakaoTalk

By Aug 06, 2021 (Gmt+09:00)


KakaoBank becomes Korea's most valuable lender 

KakaoBank Corp. became South Korea’s first listed internet-only bank and the country's most valuable lender upon its trading debut on Aug. 6 as its market capitalization topped 33 trillion won ($28.9 billion) -- about 12 trillion won above the market cap of former No. 1 lender KB Financial Group.

The company's strong debut on Kospi is likely owing to investors betting on KakaoBank's growth potential as a financial platform rather than just a bank, according to industry watchers.

On Friday, KakaoBank opened at 53,700 won and closed at 69,800 won, up by 29.98% from the opening price, which was about 37.7% higher than the initial public offering share price of 39,000 won. 

Based on the closing price, the four-year-old KakaoBank has become the 11th most valuable company in Korea with its market cap overtaking the country's four major lenders' such as KB Financial Group with 21.7 trillion won, Shinhan Financial Group with around 20.2 trillion won, Hana Financial Group with around 13 trillion won and Woori Financial Group with around 8 trillion won.

This is an impressive performance given that KakaoBank also surpassed industry heavyweights such as POSCO, LG Electronics Inc. and SK Telecom Co. on the Kospi.

Overseas investors were the driving force behind KakaoBank's soaring share price as they scooped up 225.4 billion won worth of shares while institutional investors snatched up 98.2 billion won worth of shares. Retail investors sold off 302.3 billion won worth of shares.

Industry watchers say that the successful listing is the result of investors choosing the growth potential of KakaoBank as a leading financial platform of the future rather than immediate earnings.

"Considering KakaoBank's network with the country's No.1 messaging app KakaoTalk and its lock-in effect, this is likely to be the beginning of KakaoBank's growth as a financial platform," said Kim Ji-young, an analyst at Kyobo Securities. 

KAKAOBANK TOUTED AS HOTTEST IPO OF THE YEAR

KakaoBank's IPO was highly anticipated given that it had set fresh records in demands, attracting 2,500 trillion won ($2.2 trillion) worth of bids from institutional investors and 58.3 trillion won worth of bids from retail investors -- the largest ever amount of institutional bids and the fifth-largest amount of retail bids for a domestic IPO.

Following the successful IPO, KakaoBank's existing shareholders are expected to make hefty gains ranging at around a sixfold return. Currently, the company's largest shareholder is its parent company Kakao Corp. with a 31.78% stake, followed by Korea Value Asset Management Co. with a 27.1% stake.

Other shareholders include Kookmin Bank with a 9.3% stake, Korea Investment Holdings with a 4.67% stake alongside Chinese tech giant Tencent Holdings, eBay Korea, game developer Netmarble Corp. and Korea Post.

KakaoBank becomes Korea's most valuable lender 

KAKAOBANK OVERCOMES VALUATION CONTROVERSY

Founded in 2017, KakaoBank became the No. 1 internet-only bank in Korea with over 13.6 million subscribers as of the end of 2020. The company's strong growth is on account of gaining users from its affiliate and the country's largest mobile messenger Kakao Talk, which boasts around 46 million active users from a population of about 51 million.

Earlier, KakaoBank faced a hiccup in its IPO process as there were concerns that the company was overvalued given that its valuation exceeded Korea's four leading banking groups despite having a similar profit structure to the existing financial services.

But some investors justified KakaoBank's valuation arguing that its growth potential and listing effects should be taken into consideration, noting the company's rapid penetration into the household loan market amid contactless trends. In particular, KakaoBank had been the top pick among millennials and Gen Zers in the over-the-counter market.

Last year, KakaoBank's net profit surged eightfold to 113.6 billion won compared to the year-earlier period. During the same period, its operating profit and revenue also climbed over ninefold and 21% to 122.6 billion won and 804.2 billion won, respectively.

Meanwhile, the company's affiliate Kakao Pay Corp., the digital settlement platform under Kakao, is also planning to get listed in October. Initially, the company had planned to go public at the end of August but delayed its schedule after being requested by the Financial Supervisory Service (FSS) to adjust its IPO prospectus.

Write to Tae-hoon Lee at beje@hankyung.com

Danbee Lee edited this article.

Comment 0

0/300