이 기사는 2021년 04월 19일 07시54분 thebell에 표출된 기사입니다

South Korea’s internet-only bank Kakao Bank filed for a preliminary review for its planned initial public offering (IPO) this year, with attention being paid to its fair value.

The Korea Exchange received the bank's application on Thursday, which is led by lead underwriters KB Securities and Credit Suisse Securities along with joint underwriter Citigroup Global Markets Securities.

Results are expected in June at the latest as the review process normally takes 45 working days. It is likely to make its stock market debut in August considering its follow-up procedures.

The bank is likely to discuss its possible IPO timing, size and valuation before the results are out. Kakao Group is highly likely to adjust the timeline as its affiliate Kakao Pay will also file for its preliminary IPO review in April.

Multiple South Korean major companies are currently preparing for their blockbuster IPOs. SK IE Technology recently handed in its registration statement for its Kosdaq listing in May and Krafton filed for its preliminary review earlier this month. LG Energy Solution, Hyundai Heavy Industries and Hyundai Engineering plan to make their IPO debut within this year.

Market insiders expect the bank to seek to be valued around 20 trillion won ($17.9 billion) based on its rapid growth and strong position in the platform business. It was valued at around 10 trillion won in its rights offering at the end of 2020.

Banking firms are normally valued based on price-to-book ratio (PBR), but market insiders said Kakao Bank should be valued differently as it is not a traditional bank.

Kakao Bank’s valuation target may be too high given that a PBR for domestic banks is less than 0.5 times. U.S.-based internet-only lender Charles Schwab Bank has a PBR of 2.27 times, half 4.93 times at which shares in Kakao Bank were priced in its rights offering last year.

Kakao Bank is more likely to use price-to-sales ratio and price-to-earnings ratio to value its shares. It is also expected to include global techfin firms in its peer group.

As Kakao Bank has separated both payment service business (Kakao Pay) and investment service business (Kakao Pay Securities), it will have to present a business model beyond the banking business to attract strong interest from investors. (Reporting by Suk-cheol Choi)