Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Private Capital Markets

Kakao Entertainment  / Private Capital Markets

Kakao Page is one of the jewel private companies of <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a>. Although Kakao Corp has not mentioned a definitive timeframe of the IPO of Kakao Page, we believe that the IPO could get completed some time in 2H 2020 to 2021. Kakao Page provides five major contents including webtoons, web novels, movies, web/TV dramas, and books. Kakao Corp is the controlling shareholder of Kakao Page with a 63.79% stake in the company.In late 2019, the local media mentioned the <a href="http://www.businesspost.co.kr/BP?command=article_view&amp;num=150565" target="_blank" rel="noopener">value</a> of Kakao Page to be nearly 1 trillion won to 4 trillion won. One of the companies that Kakao Page is likely to get compared to will be Netflix which has a market cap of $182 billion and has a P/S valuation multiple of 9.1x (using 2019 sales of $20 billion). If we apply the same 9.1x P/S multiple, this would suggest an implied market cap of 2.3 trillion won for Kakao Page.Kakao Page has an excellent combination of strong sales growth rate and a significant increase in operating margins. The company generated revenue of 257.1 billion won (up 37% YoY) and an operating profit of 30.6 billion won (up 141.9% YoY) in 2019.

Kakao Page is one of the jewel private companies of Kakao Corp (035720 KS). Although Kakao Corp has not mentioned a definitive timeframe of the IPO of Kakao Page, we believe that the IPO could get completed some time in 2H 2020 to 2021. Kakao Page provides five major contents including webtoons, web novels, movies, web/TV dramas, and books. Kakao Corp is the controlling shareholder of Kakao Page with a 63.79% stake in the company.In late 2019, the local media mentioned the value of Kakao Page to be nearly 1 trillion won to 4 trillion won. One of the companies that Kakao Page is likely to get compared to will be Netflix which has a market cap of $182 billion and has a P/S valuation multiple of 9.1x (using 2019 sales of $20 billion). If we apply the same 9.1x P/S multiple, this would suggest an implied market cap of 2.3 trillion won for Kakao Page.Kakao Page has an excellent combination of strong sales growth rate and a significant increase in operating margins. The company generated revenue of 257.1 billion won (up 37% YoY) and an operating profit of 30.6 billion won (up 141.9% YoY) in 2019.

South Korea

Kakao Entertainment Corp. operates as an application software development company. The Company provides online cartoons, online novels, music, and more. Kakao Entertainment conducts businesses in South Korea.

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Kakao Entertainment (103260 KS)

Initial Thoughts on the Kakao Page IPO

Kakao Page is one of the jewel private companies of Kakao Corp (035720 KS). Although Kakao Corp has not mentioned a definitive timeframe of the IPO...

Douglas Kim

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