이 기사는 2021년 06월 30일 07시38분 thebell에 표출된 기사입니다

South Korea’s internet-only bank Kakao Bank has valued itself at around 23 trillion won ($20.3 billion) in its securities registration statement, which has more than doubled from the end of 2020.

The digital lender is seeking to sell 65.45 million shares at between 33,000 won and 39,000 won per piece through its initial public offering (IPO). The price band represents a market capitalization of between 15.7 trillion won and 18.5 trillion won, a 18.8-31.3% discount to a valuation of 22.96 trillion won.

Based on the price range, the company would raise between 2.16 trillion won and 2.55 trillion won from the share sale. The bank plans to go public on August 5 after a bookbuilding process to gauge demand from institutional investors and subscriptions from individual investors.

Kakao Bank’s enterprise value has increased by nearly 2.5 times over the past few months after it was valued at 9.3 trillion won in its rights offering at the end of last year. Its valuation will be comparable with KB Financial Group’s market capitalization of 23.8 trillion won and Shinhan Financial Group’s 21.6 trillion won.

Kakao Bank and its underwriters have selected four foreign platform companies and used their average price-to-book ratio (PBR) of 7.3 times to estimate its valuation. The four firms include personal finance and consumer service company Rocket Companies, financial technology solutions provider PagSeguro Digital, online retail financial services provider TCS Group Holding PLC, and digital bank for savings and investments Nordnet AB.

The PBR of 7.3 times exceeds both domestic financial holding companies’ average PBR of 0.3 times and a PBR used in the Kakao Bank’s rights offering last year.

There may be a controversial issue that some of the selected companies have significantly different business structures from Kakao Bank’s. PagSeguro Digital is a platform company which acquired online bank PagBank as its subsidiary. Its business structure is more like Kakao Pay’s.

TCS Group Holding PLC pursues a wide range of business activities, including retail banking, insurance, credit card, ecommerce, travel, and entertainment. These are services that Kakao Group is providing through its subsidiaries.

PagSeguro Digital and TCS Group Holding PLC have PBR of 8.8 times and 8 times, respectively, which helped the Korean online lender push up its valuation.

Some industry watchers said that Kakao Bank’s value is appropriate considering the recent market craze over IPOs, the Kakao’s platform brand, strong interest in internet-only banks, and expectations for an increase in its enterprise value due to Kakao Bank's rapid earnings growth.

In the case of Kakao Bank, unlike foreign digital banks, target customers and the scalability of the business model are closer to that of a platform company, market watchers said. The internet-only bank has also benefited from Kakao Talk, the country’s largest mobile messenger service.

Kakao Bank and its underwriters have set a valuation target of about half its market capitalization on the over-the-counter (OTC) market, which currently is more than 40 trillion won.

“Krafton recently stirred up controversy by setting its IPO share price in the same range as the OTC share price, but investors are expected to accept Kakao Bank’s valuation as it is more reasonable than Krafton’s,” an industry source said. (Reporting by Suk-cheol Choi)