Kakao moves up the rankings as it spins off companies
Kakao may be on its way to becoming the third-largest enterprise in Korea as it lists more subsidiaries.
According to the Korea Exchange, the market cap of Kakao and its subsidiaries, such as KakaoBank and Kakao Games, totaled 107.8 trillion won ($92.6 billion) as of Friday’s close. That was the fifth highest, following the value of listed companies in the Samsung, SK, LG and Hyundai Motor groups.
When the estimated market caps of Kakao Pay, Kakao Entertainment, Kakao Mobility and Kakao Japan are added, Kakao may hit 150 trillion won, analysts said.
“Kakao has grown through the successful IPOs,” said IBK Securities in a report on Aug. 11. The report said that the success of Kakao Bank’s IPO has heightened expectations for the IPOs of Kakao Pay, Kakao Entertainment and Kakao Mobility.
According to a compilation of estimates by local analysts, Kakao Pay will be valued at 13.44 trillion won, Kakao Mobility 5.99 trillion won, Kakao Entertainment 12.35 trillion won and Kakao Japan 9.44 trillion won. The three companies other than Kakao Pay are expected to go public next year.
The sum, 41.22 trillion won, would give Kakao and the related companies a market cap of 149.02 trillion won.
Considering how KakaoBank’s market cap beat expectations, the No. 3 position is seen as being within reach. Kakao Bank was valuated at 11 trillion won to 31 trillion won before the IPO, but the company closed with a market cap of 36.4 trillion won on Friday.
Strong performances by KakaoBank and Kakao Games will also have a positive influence on the other companies, according to experts.
“All businesses are expected to maintain growth and the IPO momentum,” according to a report by Cape Investment & Securities on Aug. 9.
The report was titled “Kakao — Growth dynamic that doesn’t disappoint.” NH Investment & Securities called Kakao “a platform company with more to show,” while KB Securities said it will be a company with “never-ending growth.”
Kakao Pay submitted its securities registration statement on July 2. It planned to go public early August, but was requested to revise the statement by the Financial Supervisory Service (FSS). It submitted a price band of 63,000 won to 96,000 won, but is likely to lower the band in the revision.
Estimates for Kakao Pay’s valuation range from 8.25 trillion won by Yuanta Securities to 18.7 trillion won by NH Investment & Securities. Kakao Pay recorded 24.5 trillion won in sales during the second quarter, a 65 percent increase on year. It is expected to go public late September or October.
“We are preparing for a new registration statement with the second quarter earnings, and we will be revealing our plans such as schedules and other details of the IPO with the revised statement,” said Yeo Min-soo, co-CEO of Kakao.
LG and Hyundai Motor companies are also set to list. LG Energy Solution filed its original securities registration statement in June to go public this year. Hyundai Engineering is seeking to go public this year.
As of Friday, the market cap of LG group’s listed companies, excluding LX, totaled 151 trillion won and of Hyundai Motor and related public companies 143 trillion won.
BY YOON SO-YEON [firstname.lastname@example.org]