Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<div class="content-highlight">
<p>We believe that the sales and profit estimates for Krafton in 2022 is based on the company near-perfectly executing its business plans and also the regulators in China not enforcing any major new rules that could result in reduced playing time of the company's games in China.</p>
<p>As a result, we think that the probability of Krafton being able to reach the consensus sales and profit estimates in 2022 is likely to be reduced further in the coming months causing its stock price to remain relatively weak. We maintain our Negative view of Krafton.</p>
</div><h2>Krafton 2Q 2021 Earnings Comparison</h2><p>Krafton reported its first quarterly earnings report after its IPO in the past week. Krafton reported sales of 459.3 billion won (up 7% YoY and down 0.4% QoQ) and operating profit of 174.2 billion won (down 0.3% YoY and down 23.3% QoQ) in 2Q 2021. Operating margins declined from 40.7% in 2Q 2020 to 37.9% in 2Q 2021. </p><table class="table table-striped">
<colgroup>
<col>
<col span="5">
</colgroup>
<tbody>
<tr>
<td colspan="3" style="width: 207pt;"><strong>Krafton 2Q 2021 Earnings Comparison</strong></td>
<td style="width: 60pt;"></td>
<td style="width: 60pt;"></td>
<td style="width: 60pt;"></td>
</tr>
<tr>
<td><strong>(Won bn)</strong></td>
<td style="text-align: right;"><strong>2Q 2020</strong></td>
<td style="text-align: right;"><strong>2Q 2021</strong></td>
<td style="text-align: right;"><strong>% Change YoY</strong></td>
<td style="text-align: right;"><strong>1Q 2021</strong></td>
<td style="text-align: right;"><strong>% Change QoQ</strong></td>
</tr>
<tr>
<td><strong>Sales</strong></td>
<td style="text-align: right;"><strong>429.4</strong></td>
<td style="text-align: right;"><strong>459.3</strong></td>
<td style="text-align: right;"><strong>7.0%</strong></td>
<td style="text-align: right;"><strong>461.0</strong></td>
<td style="text-align: right;"><strong>-0.4%</strong></td>
</tr>
<tr>
<td>Operating Profit</td>
<td style="text-align: right;">174.8</td>
<td style="text-align: right;">174.2</td>
<td style="text-align: right;">-0.3%</td>
<td style="text-align: right;">227.2</td>
<td style="text-align: right;">-23.3%</td>
</tr>
<tr>
<td>Net Profit</td>
<td style="text-align: right;">121.2</td>
<td style="text-align: right;">141.3</td>
<td style="text-align: right;">16.6%</td>
<td style="text-align: right;">194.0</td>
<td style="text-align: right;">-27.2%</td>
</tr>
<tr>
<td></td>
<td style="text-align: right;"></td>
<td style="text-align: right;"></td>
<td style="text-align: right;"></td>
<td style="text-align: right;"></td>
<td style="text-align: right;"></td>
</tr>
<tr>
<td><strong>Profit Margins</strong></td>
<td style="text-align: right;"><strong>2Q 2020</strong></td>
<td style="text-align: right;"><strong>2Q 2021</strong></td>
<td style="text-align: right;"></td>
<td style="text-align: right;"><strong>1Q 2021</strong></td>
<td style="text-align: right;"></td>
</tr>
<tr>
<td><strong>Operating Margin</strong></td>
<td style="text-align: right;"><strong>40.7%</strong></td>
<td style="text-align: right;"><strong>37.9%</strong></td>
<td style="text-align: right;"></td>
<td style="text-align: right;"><strong>49.3%</strong></td>
<td style="text-align: right;"></td>
</tr>
<tr>
<td>Net Margin</td>
<td style="text-align: right;">28.2%</td>
<td style="text-align: right;">30.8%</td>
<td style="text-align: right;"></td>
<td style="text-align: right;">42.1%</td>
<td style="text-align: right;"></td>
</tr>
<tr>
<td colspan="2">Source: Company data</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/912/original/image_61680225921629098950166.png?1629098951" class="editor-image img-responsive" data-smartkarma-image-id="223912"></figure><div class="content-caption">Earnings CSource: Company data</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/913/original/image_45611897931629099016561.png?1629099016" class="editor-image img-responsive" data-smartkarma-image-id="223913"></figure><div class="content-caption">Sales Breakdown (Source: Company data)</div>


We believe that the sales and profit estimates for Krafton in 2022 is based on the company near-perfectly executing its business plans and also the regulators in China not enforcing any major new rules that could result in reduced playing time of the company's games in China.
As a result, we think that the probability of Krafton being able to reach the consensus sales and profit estimates in 2022 is likely to be reduced further in the coming months causing its stock price to remain relatively weak. We maintain our Negative view of Krafton.
Krafton 2Q 2021 Earnings ComparisonKrafton reported its first quarterly earnings report after its IPO in the past week. Krafton reported sales of 459.3 billion won (up 7% YoY and down 0.4% QoQ) and operating profit of 174.2 billion won (down 0.3% YoY and down 23.3% QoQ) in 2Q 2021. Operating margins declined from 40.7% in 2Q 2020 to 37.9% in 2Q 2021. 






Krafton 2Q 2021 Earnings Comparison





(Won bn)
2Q 2020
2Q 2021
% Change YoY
1Q 2021
% Change QoQ


Sales
429.4
459.3
7.0%
461.0
-0.4%


Operating Profit
174.8
174.2
-0.3%
227.2
-23.3%


Net Profit
121.2
141.3
16.6%
194.0
-27.2%










Profit Margins
2Q 2020
2Q 2021

1Q 2021



Operating Margin
40.7%
37.9%

49.3%



Net Margin
28.2%
30.8%

42.1%



Source: Company data






Earnings CSource: Company dataSales Breakdown (Source: Company data)

Krafton - Consensus Likely to Reduce Earnings Estimates in 2022

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

<h2>KOSPI 200 Fast Entry screening</h2><p>Kakao Bank and Krafton's KOSPI 200 Fast Entry are 100% certain at this point.</p><div class="content-highlight"><p><strong>They need to be within the top 50 full market cap rankings on the KOSPI for 15 trading days after listing.</strong></p></div><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/755/original/Screen+Shot+2021-08-15+at+3.07.46+AM.png?1629011369" class="editor-image img-responsive" data-smartkarma-image-id="223755"></figure></section><p>Currently, LG Display ranks 50th in the KOSPI market cap, and its market cap is in the 7.4-8 trillion range. Fast entry is possible as long as the market caps of both Kakao Bank and Krafton do not plunge below half in the next ten trading days.</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":"KOSPI 200 Fast Entry"}'>KOSPI 200 Fast Entry</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KakaoBank Corp"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>KakaoBank Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Krafton Inc"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Krafton Inc</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"LG Display Co Ltd"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'><div><div>LG Display Co Ltd, currently at the 50th spot</div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44414}' data-sheets-numberformat='[null,5,"mm. dd",1]'>08. 06</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":33.1619965426}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C2/1000000000000">₩33.16T</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7.961399325}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C4/1000000000000">₩7.96T</td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44417}' data-sheets-numberformat='[null,5,"mm. dd",1]' data-sheets-formula="=R[-1]C[0]+3">08. 09</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":37.2953686045}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C2/1000000000000">₩37.30T</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7.854054615}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C4/1000000000000">₩7.85T</td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44418}' data-sheets-numberformat='[null,5,"mm. dd",1]' data-sheets-formula="=R[-1]C[0]+1">08. 10</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":33.9221569218}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C2/1000000000000">₩33.92T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":22.19972378}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C3/1000000000000">₩22.20T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7.925617755}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C4/1000000000000">₩7.93T</td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44419}' data-sheets-numberformat='[null,5,"mm. dd",1]' data-sheets-formula="=R[-1]C[0]+1">08. 11</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":35.3474576328}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C2/1000000000000">₩35.35T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":19.90151449}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C3/1000000000000">₩19.90T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7.90772697}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C4/1000000000000">₩7.91T</td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44420}' data-sheets-numberformat='[null,5,"mm. dd",1]' data-sheets-formula="=R[-1]C[0]+1">08. 12</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":35.0623974906}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C2/1000000000000">₩35.06T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":19.85261642}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C3/1000000000000">₩19.85T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7.710928335}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C4/1000000000000">₩7.71T</td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44421}' data-sheets-numberformat='[null,5,"mm. dd",1]' data-sheets-formula="=R[-1]C[0]+1">08. 13</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":36.3926781542}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C2/1000000000000">₩36.39T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":21.36845659}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C3/1000000000000">₩21.37T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7.44256656}' data-sheets-numberformat='[null,2,"₩#,##0.00T",1]' data-sheets-formula="=R[0]C[3]*R3C4/1000000000000">₩7.44T</td>
</tr>
<tr><td colspan="4" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>

KOSPI 200 Fast Entry screeningKakao Bank and Krafton's KOSPI 200 Fast Entry are 100% certain at this point.They need to be within the top 50 full market cap rankings on the KOSPI for 15 trading days after listing.Currently, LG Display ranks 50th in the KOSPI market cap, and its market cap is in the 7.4-8 trillion range. Fast entry is possible as long as the market caps of both Kakao Bank and Krafton do not plunge below half in the next ten trading days.








KOSPI 200 Fast Entry
KakaoBank Corp
Krafton Inc
LG Display Co Ltd, currently at the 50th spot


08. 06
₩33.16T
-
₩7.96T


08. 09
₩37.30T
-
₩7.85T


08. 10
₩33.92T
₩22.20T
₩7.93T


08. 11
₩35.35T
₩19.90T
₩7.91T


08. 12
₩35.06T
₩19.85T
₩7.71T


08. 13
₩36.39T
₩21.37T
₩7.44T

Source: KRX



Why Would Kakao Bank/Krafton's KOSPI 200 Fast Entry Float Estimations Be Such an Extraordinary Task?

<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

Equity Capital Markets

<h2><strong>Netmarble selling Kakao Bank</strong></h2><p>We got to know who was driving Kakao Bank's share price drop today.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/142/original/Screen+Shot+2021-08-10+at+12.47.04+PM.png?1628614043" class="editor-image img-responsive" data-smartkarma-image-id="223142"></figure><p></p></section><p>That is, Netmarble sold about 40% of its stake in Kakao Bank today. The following is Netmarble's regulatory filing published after the market closed.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/141/original/Screen+Shot+2021-08-10+at+12.45.18+PM.png?1628613964" class="editor-image img-responsive" data-smartkarma-image-id="223141"></figure></section><p>Netmarble sold 6 million Kakao Bank shares in the market during the regular trading hours for a total of ₩430.2B. So the sale price per share is ₩71,697.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Netmarble selloff"}'>Netmarble selling</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares sold"}'>Shares sold</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6000000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>6,000,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total amount"}'>Total amount</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":430.1838765}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩430.2B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Sellng price per share"}'><strong>- Sale price per share</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":71697.31275}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-1]C[0]*1000000000/R[-2]C[0]"><strong>₩71,697</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>On the third trading day of Kakao Bank, local retail again led the trading, and institutional investors did not show an active trading trend. So, it appears that Netmarble's 6 million shares mostly went to local retail investors.</p><p><strong>However, among institutional investors, local pensions traded fairly actively, and a meaningful portion of Netmarble's selling volume seems to have flowed to them. Perhaps this should be a preemptive action for the KOSPI 200 rebalancing trading.</strong></p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Trade by investor type"}'>Trade by investor type on August 10</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Sell"}'>Sell</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Buy"}'>Buy</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Net"}'>Net</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Brokerages &amp; investment advisories managing proprietary assets"}'>Brokerages &amp; investment advisories</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":38095}' data-sheets-numberformat='[null,2,"#,##0",1]'>38,095</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":42140}' data-sheets-numberformat='[null,2,"#,##0",1]'>42,140</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4045}' data-sheets-numberformat='[null,2,"#,##0",1]'>+4,045</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Insurance"}'>Insurance</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50742}' data-sheets-numberformat='[null,2,"#,##0",1]'>50,742</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":95564}' data-sheets-numberformat='[null,2,"#,##0",1]'>95,564</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44822}' data-sheets-numberformat='[null,2,"#,##0",1]'>+44,822</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Publicly raised funds"}'>Publicly raised funds</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50879}' data-sheets-numberformat='[null,2,"#,##0",1]'>50,879</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":90095}' data-sheets-numberformat='[null,2,"#,##0",1]'>90,095</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":39216}' data-sheets-numberformat='[null,2,"#,##0",1]'>+39,216</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Private equity"}'>Private equity</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":65862}' data-sheets-numberformat='[null,2,"#,##0",1]'>65,862</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":28528}' data-sheets-numberformat='[null,2,"#,##0",1]'>28,528</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-37334}' data-sheets-numberformat='[null,2,"#,##0",1]'>-37,334</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Banks"}'>Banks</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"#,##0",1]'>0</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"#,##0",1]'>0</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"#,##0",1]'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Other - financial (eg. savings banks)"}'>Other - financial (e.g., savings banks)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":100}' data-sheets-numberformat='[null,2,"#,##0",1]'>100</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1564}' data-sheets-numberformat='[null,2,"#,##0",1]'>1,564</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1464}' data-sheets-numberformat='[null,2,"#,##0",1]'>+1,464</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pension"}'><strong>Pension</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":73722}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>73,722</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":901630}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>901,630</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":827908}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>+827,908</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Other - corporations"}'><strong>Other - corporations (→ should be mostly Netmarble)</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6038836}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>6,038,836</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":66578}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>66,578</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-5972258}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>-5,972,258</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Local retail"}'><strong>Local retail</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":19536212}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>19,536,212</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":24483461}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>24,483,461</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4947249}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>+4,947,249</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Foreign"}'>Foreign</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":592781}' data-sheets-numberformat='[null,2,"#,##0",1]'>592,781</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":710588}' data-sheets-numberformat='[null,2,"#,##0",1]'>710,588</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":117807}' data-sheets-numberformat='[null,2,"#,##0",1]'>+117,807</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Other - foreign"}'>Other - foreign</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":47893}' data-sheets-numberformat='[null,2,"#,##0",1]'>47,893</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":74974}' data-sheets-numberformat='[null,2,"#,##0",1]'>74,974</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":27081}' data-sheets-numberformat='[null,2,"#,##0",1]'>+27,081</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total"}'>Total</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":26495122}' data-sheets-numberformat='[null,2,"#,##0",1]'>26,495,122</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":26495122}' data-sheets-numberformat='[null,2,"#,##0",1]'>26,495,122</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}'>0</td>
</tr>
<tr><td colspan="4" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p>As a result, Netmarble's stake decreased from 3.21% to 1.94%. Of these, 1.60% are locked up for 3 months. On the other hand, 0.34% can be sold additionally. Netmarble did not disclose plans for further selling of its holdings.</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: 334.886px;" data-sheets-value='{"1":2,"2":"Shareholding"}'>Shareholding</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":2,"2":"Post-IPO"}'>Post-IPO</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":2,"2":"Shares"}'>Shares</td>
<td style="text-align: right; width: 177.514px;" data-sheets-value='{"1":2,"2":"After today"}'>After today</td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Kakao"}'>Kakao</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.2726450439552191}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">27.26%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":129533725}' data-sheets-numberformat='[null,2,"#,##0",1]'>129,533,725</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Korea Investment Financial Holdings"}'>Korea Investment Financial Holdings</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.27264504185040006}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">27.26%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":129533724}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=R[-25]C[0]+R[-24]C[0]">129,533,724</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,3,"0.00%",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"KB Kookmin Bank"}'>KB Kookmin Bank</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.08018930750396573}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">8.02%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":38097959}' data-sheets-numberformat='[null,2,"#,##0",1]'>38,097,959</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,3,"0.00%",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Netmarble (KS 251270)"}'><strong>Netmarble (KS 251270)</strong></td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.032075721738694905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3"><strong>3.21%</strong></td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":15239183}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>15,239,183</strong></td>
<td style="text-align: right; width: 177.514px;" data-sheets-value='{"1":3,"3":9239183}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=R[0]C[-1]-6000000"><strong>1.94% (9,239,183 shares)</strong></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Tencent"}'>Tencent</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.032075721738694905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">3.21%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":15239183}' data-sheets-numberformat='[null,2,"#,##0",1]'>15,239,183</td>
<td style="text-align: right; width: 177.514px;" data-sheets-value='{"1":3,"3":0.019446807811211428}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[-1]C[0]/R[10]C[-1]"></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Seoul Guarantee Insurance Company"}'>Seoul Guarantee Insurance Company</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.032075721738694905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">3.21%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":15239183}' data-sheets-numberformat='[null,2,"#,##0",1]'>15,239,183</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Korea Post"}'>Korea Post</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.032075721738694905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">3.21%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":15239183}' data-sheets-numberformat='[null,2,"#,##0",1]'>15,239,183</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"eBay Korea"}'>eBay Korea</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.032075721738694905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">3.21%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":15239183}' data-sheets-numberformat='[null,2,"#,##0",1]'>15,239,183</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Anchor Equity Partners"}'>Anchor Equity Partners</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.02239527403140403}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">2.24%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":10640000}' data-sheets-numberformat='[null,2,"#,##0",1]'>10,640,000</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"TPG Capital"}'>TPG Capital</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.02239527403140403}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">2.24%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":10640000}' data-sheets-numberformat='[null,2,"#,##0",1]'>10,640,000</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Yes24 (KS 053280)"}'>Yes24 (KS 053280)</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.011958303864201188}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">1.20%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":5681393}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=R[-16]C[1]">5,681,393</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"ESOP (post-IPO shareholders)"}'>ESOP</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.027552080551793114}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">2.76%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":13090000}' data-sheets-numberformat='[null,2,"#,##0",1]'>13,090,000</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Pre-IPO non-lockup minority shareholders having less than a 1% stake"}'>Other pre-IPO non-lockup minority shareholders</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.019632743310965765}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">1.96%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":9327521}' data-sheets-numberformat='[null,2,"#,##0",1]'>9,327,521</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"IPO shareholders (institutional &amp; retail)"}'>IPO shareholders (institutional &amp; retail)</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.11020832220717246}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">11.02%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":52360000}' data-sheets-numberformat='[null,2,"#,##0",1]'>52,360,000</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Total"}'>Total</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.9999999999999999}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=sum(R[-14]C[0]:R[-1]C[0])">100.00%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":475100237}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=sum(R[-14]C[0]:R[-1]C[0])">475,100,237</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr><td colspan="4" rowspan="1" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Netmarble selling Kakao BankWe got to know who was driving Kakao Bank's share price drop today.That is, Netmarble sold about 40% of its stake in Kakao Bank today. The following is Netmarble's regulatory filing published after the market closed.Netmarble sold 6 million Kakao Bank shares in the market during the regular trading hours for a total of ₩430.2B. So the sale price per share is ₩71,697.





Netmarble selling

Shares sold
6,000,000


Total amount
₩430.2B


- Sale price per share
₩71,697

Source: DART

On the third trading day of Kakao Bank, local retail again led the trading, and institutional investors did not show an active trading trend. So, it appears that Netmarble's 6 million shares mostly went to local retail investors.However, among institutional investors, local pensions traded fairly actively, and a meaningful portion of Netmarble's selling volume seems to have flowed to them. Perhaps this should be a preemptive action for the KOSPI 200 rebalancing trading.








Trade by investor type on August 10
Sell
Buy
Net


Brokerages &amp; investment advisories
38,095
42,140
+4,045


Insurance
50,742
95,564
+44,822


Publicly raised funds
50,879
90,095
+39,216


Private equity
65,862
28,528
-37,334


Banks
0
0
0


Other - financial (e.g., savings banks)
100
1,564
+1,464


Pension
73,722
901,630
+827,908


Other - corporations (→ should be mostly Netmarble)
6,038,836
66,578
-5,972,258


Local retail
19,536,212
24,483,461
+4,947,249


Foreign
592,781
710,588
+117,807


Other - foreign
47,893
74,974
+27,081


Total
26,495,122
26,495,122
0

Source: KRX

As a result, Netmarble's stake decreased from 3.21% to 1.94%. Of these, 1.60% are locked up for 3 months. On the other hand, 0.34% can be sold additionally. Netmarble did not disclose plans for further selling of its holdings.








Shareholding
Post-IPO
Shares
After today


Kakao
27.26%
129,533,725



Korea Investment Financial Holdings
27.26%
129,533,724



KB Kookmin Bank
8.02%
38,097,959



Netmarble (KS 251270)
3.21%
15,239,183
1.94% (9,239,183 shares)


Tencent
3.21%
15,239,183



Seoul Guarantee Insurance Company
3.21%
15,239,183



Korea Post
3.21%
15,239,183



eBay Korea
3.21%
15,239,183



Anchor Equity Partners
2.24%
10,640,000



TPG Capital
2.24%
10,640,000



Yes24 (KS 053280)
1.20%
5,681,393



ESOP
2.76%
13,090,000



Other pre-IPO non-lockup minority shareholders
1.96%
9,327,521



IPO shareholders (institutional &amp; retail)
11.02%
52,360,000



Total
100.00%
475,100,237


Source: DART



Netmarble Selling Kakao Bank: Additional Sellings & What Should We Do?

<div class="content-highlight">
<p>On 10 August, it was reported that <a href="https://www.smartkarma.com/entities/netmarble-corporation" target="_blank" data-smartkarma-citation="entities:22839:1" rel="noopener">Netmarble Corporation (251270 KS)</a> sold 6 million shares of <a href="https://www.smartkarma.com/entities/kakaobank-corp" target="_blank" data-smartkarma-citation="entities:33501:1" rel="noopener">KakaoBank (323410 KS)</a> for 430 billion won. The average selling price was 71,697 won (vs. current price of 71,400 won). Post this deal, Netmarble's stake in Kakao Bank was reduced to 1.94%.</p>
<p>Netmarble mentioned that it sold its shares of Kakao Bank to improve its liquidity and cash balance. The sale of Kakao Bank's shares by Netmarble helped to push down the share price of Kakao Bank by 9%. </p>
<p>We believe that this sale of Kakao Bank by Netmarble is likely to have a further negative impact on Kakao Bank shares. More investors will be concerned about the overall valuations of the company as a major original investor in Kakao Bank have sold their shares in just the third day of trading post IPO. </p>
</div>


On 10 August, it was reported that Netmarble Corporation (251270 KS) sold 6 million shares of KakaoBank (323410 KS) for 430 billion won. The average selling price was 71,697 won (vs. current price of 71,400 won). Post this deal, Netmarble's stake in Kakao Bank was reduced to 1.94%.
Netmarble mentioned that it sold its shares of Kakao Bank to improve its liquidity and cash balance. The sale of Kakao Bank's shares by Netmarble helped to push down the share price of Kakao Bank by 9%. 
We believe that this sale of Kakao Bank by Netmarble is likely to have a further negative impact on Kakao Bank shares. More investors will be concerned about the overall valuations of the company as a major original investor in Kakao Bank have sold their shares in just the third day of trading post IPO. 


Netmarble Sells 6 Million Shares of Kakao Bank for 430 Billion Won

South Korea

Netmarble Corporation develops and publishes mobile games. The Company develops and publishes casual games, action, sports games, strategy, simulation games, and social casino games. Netmarble offers services worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Netmarble (251270 KS)

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Netmarble Sells 6 Million Shares of Kakao Bank for 430 Billion Won

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Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)