Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<p>It is now clear that Netmarble sold part of its stake in Kakao Bank yesterday in the market to finance the acquisition of SpinX, a social casino company.</p><p>In other words, Netmarble sold its Kakao Bank stake because it needed immediate cash. <span>Earlier this month, Netmarble announced that it would purchase a 100% stake in Leonardo Interactive Holdings Limited, the parent company of SpinX.</span></p><div class="content-highlight"><p><strong>The 100% stake acquisition price is ₩2.513T.</strong></p></div><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/219/original/Screen+Shot+2021-08-11+at+1.48.24+AM.png?1628661029" class="editor-image img-responsive" data-smartkarma-image-id="223219"></figure></section><p>Netmarble said in a regulatory filing that it would pay 80% of the acquisition price at the time of contract termination and the remaining 20% ​​over the next four years.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/225/original/Screen+Shot+2021-08-11+at+1.51.07+AM.png?1628661602" class="editor-image img-responsive" data-smartkarma-image-id="223225"></figure></section><p><strong>It means that the total money Netmarble needs right now is ₩2.104T, which is 80% of the acquisition amount. Netmarble revealed that ₩1.779T of this ₩2.104T was covered by short-term borrowing. In other words, the immediate cash needed right now is ₩232B.</strong></p><p>However, Netmarble's cash assets at the end of this first quarter stood at ₩260B. Even ₩232B is a size that needs to use up all of its cash holdings, so it places a significant financial burden on Netmarble.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/228/original/Screen+Shot+2021-08-11+at+2.05.56+AM.png?1628662449" class="editor-image img-responsive" data-smartkarma-image-id="223228"></figure></section>

It is now clear that Netmarble sold part of its stake in Kakao Bank yesterday in the market to finance the acquisition of SpinX, a social casino company.In other words, Netmarble sold its Kakao Bank stake because it needed immediate cash. Earlier this month, Netmarble announced that it would purchase a 100% stake in Leonardo Interactive Holdings Limited, the parent company of SpinX.The 100% stake acquisition price is ₩2.513T.Netmarble said in a regulatory filing that it would pay 80% of the acquisition price at the time of contract termination and the remaining 20% ​​over the next four years.It means that the total money Netmarble needs right now is ₩2.104T, which is 80% of the acquisition amount. Netmarble revealed that ₩1.779T of this ₩2.104T was covered by short-term borrowing. In other words, the immediate cash needed right now is ₩232B.However, Netmarble's cash assets at the end of this first quarter stood at ₩260B. Even ₩232B is a size that needs to use up all of its cash holdings, so it places a significant financial burden on Netmarble.

Three Local Stocks Exposed to Netmarble's Stake Sale Risk: NCsoft, HYBE, & Kakao Games

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<div>
<p>Coupang, one of the largest e-commerce players in Korea, was listed on 11th Mar 2021 when it raised around US$4.5bn via selling a mix of primary and secondary shares in its US IPO.</p>
<p>In this note, we'll talk about the upcoming lock-up expiry.</p>
<p>We've covered various aspects of the deal in our earlier insights: </p>
</div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-positives-fast-growth-sticky-customers" target="_blank" rel="noopener">Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers</a>, </li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-negatives-horrendous-data-disclosures-including-no-mention-of-ott-launch" target="_blank" rel="noopener">Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-fair-bit-of-competition-but-it-s-doing-better-than-most-local-peers" target="_blank" rel="noopener">Coupang Pre-IPO - Fair Bit of Competition but It’s Doing Better than Most Local Peers</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-earnings-forecast-and-valuation" target="_blank" rel="noopener">Coupang Pre-IPO - Earnings Forecast and Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-ipo-momentum-play-unequal-lock-up-index-inclusion" target="_blank" rel="noopener">Coupang IPO - Momentum Play, Unequal Lock-Up, Index Inclusion</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-ipo-quick-note-peers-move-down-range-moves-up-ripe-for-trading" target="_blank" rel="noopener">Coupang IPO - Quick Note - Peers Move Down, Range Moves Up. Ripe for Trading.</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-ipo-trading-most-hit-near-term-peak-on-the-first-day-key-trading-lock-up-dates" target="_blank" rel="noopener">Coupang IPO Trading - Most Hit near Term Peak on the First Day - Key Trading/​Lock-Up Dates</a></li>
</ul></div>


Coupang, one of the largest e-commerce players in Korea, was listed on 11th Mar 2021 when it raised around US$4.5bn via selling a mix of primary and secondary shares in its US IPO.
In this note, we'll talk about the upcoming lock-up expiry.
We've covered various aspects of the deal in our earlier insights: 


Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers, 
Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch
Coupang Pre-IPO - Fair Bit of Competition but It’s Doing Better than Most Local Peers
Coupang Pre-IPO - Earnings Forecast and Valuation
Coupang IPO - Momentum Play, Unequal Lock-Up, Index Inclusion
Coupang IPO - Quick Note - Peers Move Down, Range Moves Up. Ripe for Trading.
Coupang IPO Trading - Most Hit near Term Peak on the First Day - Key Trading/​Lock-Up Dates


Coupang Lock-Up Expiry - Failed to Meet Multiple Lock-Up Exits; Now Hitting the US$7bn Expiry

Equity Capital Markets

<p>Kakao Bank's listing-day performance certainly exceeds expectations.</p><p>The opening price has risen by 38% compared to the offering price, and today's high was ₩68,000, and it currently settles at ₩63,100. This is a 60% increase from the offering price, and the market cap reaches ₩30T.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Kakao Bank today"}'>Kakao Bank today</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Price"}'>Price</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Market cap"}'>Market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"From the offering price"}'>From the offering price</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering price"}'>Offering price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":39000}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩39,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":18.528909243}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula="=R[0]C[-1]*R1C5/1000000000000">₩18.53T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R2C2)/R2C2">-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Opening price"}'>Opening price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":53700}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩53,700</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":25.5128827269}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula="=R[0]C[-1]*R1C5/1000000000000">₩25.51T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3769230769230769}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R2C2)/R2C2">37.69%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Daily high"}'>Daily high</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":68000}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩68,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":32.306816116}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula="=R[0]C[-1]*R1C5/1000000000000">₩32.31T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.7435897435897436}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R2C2)/R2C2">74.36%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Daily low"}'>Daily low</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":51000}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩51,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":24.230112087}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula="=R[0]C[-1]*R1C5/1000000000000">₩24.23T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3076923076923077}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R2C2)/R2C2">30.77%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Current"}'>Current</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":63100}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩63,100</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":29.9788249547}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula="=R[0]C[-1]*R1C5/1000000000000">₩29.98T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.617948717948718}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R2C2)/R2C2">61.79%</td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p>As a result, Kakao Bank has easily surpassed its direct competitors, KB Financial and Shinhan Financial, in market capitalization and is currently ranked 12th in the KOSPI by market capitalization.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":2,"2":"KOSPI top 15"}'>KOSPI top 15</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":2,"2":"Market cap"}'>Market cap</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":1}'>1</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Electronics</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"005930"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="005930"'>005930</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":487.731234335}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩487.73T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":2}'>2</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"SK Hynix Inc"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK Hynix</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"000660"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="000660"'>000660</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":85.90427907}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩85.90T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":3}'>3</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Naver Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Naver</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"035420"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="035420"'>035420</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":72.60442059}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩72.60T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":4}'>4</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Kakao Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Kakao</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"035720"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="035720"'>035720</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":64.89119358}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩64.89T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":5}'>5</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd Preference Shares Non Voting"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Electronics 1P</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"005935"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="005935"'>005935</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":61.55192516}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩61.55T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":6}'>6</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Samsung Biologics Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Biologics</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"207940"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="207940"'>207940</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":60.8718}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩60.87T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":7}'>7</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"LG Chem Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>LG Chem</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"051910"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="051910"'>051910</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":59.791714521}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩59.79T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":8}'>8</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Samsung SDI Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung SDI</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"006400"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="006400"'>006400</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":53.36127528}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩53.36T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":9}'>9</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Hyundai Motor Co"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Hyundai Motor</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"005380"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="005380"'>005380</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":47.648005701}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩47.65T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":10}'>10</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Celltrion, Inc."}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Celltrion</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"068270"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="068270"'>068270</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":33.438886896}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩33.44T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":11}'>11</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Kia Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Kia</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"000270"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="000270"'>000270</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":34.6991025032}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩34.70T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":12}'><strong>12</strong></td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Kakao Bank"}'><strong>Kakao Bank</strong></td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"323410"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="323410"'><strong>323410</strong></td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":29.9788249547}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula="=R[-15]C[-1]"><strong>₩29.98T</strong></td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":13}'>13</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"POSCO"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>POSCO</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"005490"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="005490"'>005490</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":29.9486778225}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩29.95T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":14}'>14</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"Samsung C&amp;T Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung C&amp;T</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"028260"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="028260"'>028260</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":26.911739664}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩26.91T</td>
</tr>
<tr>
<td style="width: 107.017px;" data-sheets-value='{"1":3,"3":15}'>15</td>
<td style="width: 296.08px;" data-sheets-value='{"1":2,"2":"HYUNDAI MOBIS CO., LTD."}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Hyundai Mobis</td>
<td style="width: 121.023px;" data-sheets-value='{"1":2,"2":"012330"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="012330"'>012330</td>
<td style="text-align: right; width: 184.091px;" data-sheets-value='{"1":3,"3":26.257687038}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-1], "price")*googlefinance(R[0]C[-1], "shares")/1000000000000'>₩26.26T</td>
</tr>
<tr><td colspan="4" rowspan="1" style="width: 708.21px;" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><h2><strong>Strong foreign buying this morning</strong></h2><div class="content-highlight"><ul>
<li><strong>Kakao Bank's share price fell below the opening price early this morning, raising some concerns. However, a strong buying from investors presumed to be foreign institutions came in rapidly through the foreign brokerage counter, mainly Credit Suisse.</strong></li>
<li><strong>As of 11:30 a.m., a purchase order of 6 million shares came in through the CS counter. This is 15% of the total purchase volume, which is an unusually large amount brokered by a foreign brokerage for local stocks any given day.</strong></li>
<li><strong>Therefore, the proportion of net buying by foreign investors is currently overwhelmingly high.</strong></li>
</ul></div>

Kakao Bank's listing-day performance certainly exceeds expectations.The opening price has risen by 38% compared to the offering price, and today's high was ₩68,000, and it currently settles at ₩63,100. This is a 60% increase from the offering price, and the market cap reaches ₩30T.








Kakao Bank today
Price
Market cap
From the offering price


Offering price
₩39,000
₩18.53T
-


Opening price
₩53,700
₩25.51T
37.69%


Daily high
₩68,000
₩32.31T
74.36%


Daily low
₩51,000
₩24.23T
30.77%


Current
₩63,100
₩29.98T
61.79%

Source: KRX

As a result, Kakao Bank has easily surpassed its direct competitors, KB Financial and Shinhan Financial, in market capitalization and is currently ranked 12th in the KOSPI by market capitalization.








KOSPI top 15
Name
Ticker
Market cap


1
Samsung Electronics
005930
₩487.73T


2
SK Hynix
000660
₩85.90T


3
Naver
035420
₩72.60T


4
Kakao
035720
₩64.89T


5
Samsung Electronics 1P
005935
₩61.55T


6
Samsung Biologics
207940
₩60.87T


7
LG Chem
051910
₩59.79T


8
Samsung SDI
006400
₩53.36T


9
Hyundai Motor
005380
₩47.65T


10
Celltrion
068270
₩33.44T


11
Kia
000270
₩34.70T


12
Kakao Bank
323410
₩29.98T


13
POSCO
005490
₩29.95T


14
Samsung C&amp;T
028260
₩26.91T


15
Hyundai Mobis
012330
₩26.26T

Source: KRX

Strong foreign buying this morning
Kakao Bank's share price fell below the opening price early this morning, raising some concerns. However, a strong buying from investors presumed to be foreign institutions came in rapidly through the foreign brokerage counter, mainly Credit Suisse.
As of 11:30 a.m., a purchase order of 6 million shares came in through the CS counter. This is 15% of the total purchase volume, which is an unusually large amount brokered by a foreign brokerage for local stocks any given day.
Therefore, the proportion of net buying by foreign investors is currently overwhelmingly high.


Kakao Bank, Apparently Passive Money Flowing in This Morning

AllocationAll the allocation results for the Kakao Bank IPO are now available at DART. Institutional investors took 55% of the total offering, and retail took 25.5%, receiving the forfeited shares from the ESOP subscriptions.
Almost all institutional allocations have gone to local publicly raised funds and pensions known for their long-term holding tendencies. Yes, as expected, those presumably long-term foreign funds also took a substantial portion, which Kakao Bank needs to boost the foreign ownership percentage, often interpreted as a symbolic indicator of popularity.









Allocation by type
Allocated, % of the offering
Final, % of the offering
Final, % of post-IPO SO


Institutional
55.00%
55.00%
7.58%


1. Local publicly raised funds
-
16.00%
2.21%


2. Local Br/IA
-
1.02%
0.14%


3. Local pension, etc.
-
9.83%
1.36%


4. Local others
-
0.61%
0.08%


5. Foreign
-
27.53%
3.80%


6. Foreign, other
-
0.00%
0.00%


Retail
25.00%
25.50%
3.51%


ESOP
20.00%
19.50%
2.68%


Total
100.00%
100.00%
13.78%

Source: DART



Below is the classification of institutional investors as defined in KRX statistics.






By investor type

1. Local publicly raised funds

Long-term


2. Local brokerages/investment advisories

Short-term


3. Local pensions, funds managing proprietary assets, banks, and insurance companies
Long-term


4. Local others: discretionary investment companies, savings banks, real estate trust companies, capital companies, and leasing companies
Mainly, short-term


5. Foreign institutional investors with a transaction record: foreign IPO/hedge funds

Depends


6. Foreign institutional investors without transaction record: local hot money

Mostly, short-term

Source: DART




Lockups
Institutional allocations without lockup account for only 40%. Most of the shares allocated to local publicly raised funds and pensions are locked up for 3-6 months. Foreign funds also locked up about 25% of their allocated shares, which is much higher than usual.
The initial expectation was to take the lockup weight to a minimum considering the immediate float, but it turns out that Kakao Bank has aggressively locked up than originally expected.















Lockups by institution type
1. Local PO
2. Local Br/IA
3. Local pension, etc.
4. Local others
5. Foreign
6. Foreign, other
Total


6 months
13.02%
0.25%
14.84%
0.29%
8.42%
0.00%
36.81%


3 months
9.63%
0.62%
1.86%
0.29%
1.67%
0.00%
14.07%


1 month
4.13%
0.23%
0.59%
0.17%
3.61%
0.00%
8.72%


15 days
0.17%
0.04%
0.01%
0.00%
0.00%
0.00%
0.22%


No lockup
2.15%
0.71%
0.58%
0.37%
36.36%
0.00%
40.18%


Total
29.10%
1.85%
17.88%
1.12%
50.06%
0.00%
100.00%

Source: DART


The amount released to the market immediately after the listing is 22.55% of the total number of outstanding shares. This includes pre-IPO minority shareholders (mostly VC and corporate), which account for 15.99%.












Post-IPO lockup releases, as a % of SO
IPO shareholders
Major shareholder
ESOP
VC/corporate stakeholders
Other pre-IPO minority shareholders (mostly VC/corporate)
Total


1 year
0.00%
0.00%
2.68%
0.00%
0.00%
2.68%


6 months
2.79%
27.26%
0.00%
39.76%
0.00%
69.81%


3 months
1.07%
0.00%
0.00%
3.20%
0.00%
4.27%


1 month
0.66%
0.00%
0.00%
0.00%
0.00%
0.66%


15 days
0.02%
0.00%
0.00%
0.00%
0.00%
0.02%


Lock-up
4.54%
27.26%
2.68%
42.96%
0.00%
77.44%


No lock-up
6.56%
0.00%
0.00%
0.00%
15.99%
22.55%

Source: DART





Kakao Bank: Full Allocation Results, Index Floats, & Fast Entry Possibilities

As expected, Krafton's IPO price has been confirmed at ₩498,000, the upper end of the indicative price band. So, Krafton gets to raise a total of ₩4.3T through this public offering, and its market cap reaches ₩24.4T.







Pricing
Low
High (final)


Price
₩400,000
₩498,000


Base deal size
₩3,461.7B
₩4,309.8B


- Institutional allotment
₩1,903.9B
₩2,370.4B


Implied market cap
₩19,559.2B
₩24,351.2B


- Discount
30.93%
14.01%

Source: DART

The competitive rate for institutional subscriptions came out to be 243.2 to 1, similar to what has already been leaked from the market. Compared to the recent mega IPOs that easily exceeded 1,000 to 1, it can be seen that this IPO's institutional participation rate was low. However, considering that this IPO has a substantially larger offering size and a very aggressive price, it can be concluded that the interest of institutions was higher than expected.









By investor type
Institution
%
Demand
%


Local publicly raised funds
231
37.20%
445,792,000
38.52%


Local brokerages/investment advisories
18
2.90%
28,393,000
2.45%


Local pensions, funds managing proprietary assets, banks, and insurance companies
94
15.14%
242,965,000
20.99%


Local others (mostly discretionary investment companies - local hedge funds)
104
16.75%
234,982,000
20.30%


Foreign (foreign IPO funds &amp; hedge funds)
146
23.51%
62,498,497
5.40%


Foreign others (mostly local hot money)
28
4.51%
142,697,000
12.33%


Total
621
100.00%
1,157,327,497
100.00%


Subscription rate
243.15 to 1

Source: DART

Looking at the application results for each type of institution below, we can find a very interesting fact.
First, a large number of foreign institutions with business relationships (i.e., major foreign investment institutions) participated in this subscription. The share of 23.5% by the number of participating institutions is significantly higher than the typical level for local IPOs. Of course, most of them applied based on actual demand, so their proportion of total subscription volume is only 5.4%. However, considering that all these quantities are actual demand, we can safely say that their participation level is quite high. This is a result consistent with what Mirase Asset (the bookrunner) has continuously leaked to the market about the active participation of many major overseas institutions.

Another point to note is that the number of participating local institutions is remarkably low, consistent with the initial forecast that most small and medium-sized institutions skipped this IPO due to scheduling conflicts with LG Energy Solutions.
Finally, institutions belonging to the category 'Foreign others' were quite aggressive in taking orders despite a small number of participating institutions. These are mainly local hot money managers, who are the most active in early profit realization trading. In other words, their aggressive move to secure Krafton IPO shares means that they are heavily betting on a short-term price increase due to the entry of local retailers immediately after Krafton's listing.

The category 'Foreign' indicates foreign institutional investors with transaction records. They are foreign institutional investors who have a business relationship with the underwriter or of whom the underwriter acquirer is aware of the identity. So, these foreign institutions can be considered well-established overseas institutions actually based overseas.
In contrast, the category 'Foreign others' indicates foreign institutional investors without transaction records. Most of them are local hot money only whose legal office is registered overseas.
The "Unspecified" category usually indicates that they want the shares above the high end. With that in mind, 37.4% have gone for the upper end or above. The other 57.5% selected 75-100% of the upper end. So, most of the orders (95%) are priced at 75-100% of the upper end or higher. Unlike the initial concerns, we can say the institutional pricing is quite aggressive.









By price
Institution
%
Demand
%


Above high end
59
9.50%
279,666,000
24.16%


75-100% of high end
246
39.61%
665,029,823
57.46%


50-75% of high end
1
0.16%
1,000
0.00%


25-50% of high end
0
0.00%
0
0.00%


0-25% of high end
7
1.13%
11,370,000
0.98%


Median
0
0.00%
0
0.00%


75-100% of median
1
0.16%
1,000
0.00%


50-75% of median
0
0.00%
0
0.00%


25-50% of median
3
0.48%
77,000
0.01%


0-25% of median
105
16.91%
48,077,000
4.15%


Low end or below
27
4.35%
37,000
0.00%


Unspecified
172
27.70%
153,068,674
13.23%


Total
621
100.00%
1,157,327,497
100.00%

Source: DART



Krafton Bookbuilding: Subscription/Lockup Data & Resulting Implications

South Korea

Kakao Games Corp. operates as a multiply platform gaming company. The Company provides mobile games, computer games, virtual reality games, and other related products. Kakao Games markets its products worldwide.

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Kakao Games (293490 KS)

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