Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>Millie's Library is trying to complete its IPO again in September 2023, after a failed attempt in November 2022. The IPO price range is from 20,000 won to 23,000 won.</li>
<li>Founded in 2016, Millie's Library is a reading platform company that introduced the first monthly e-book subscription service in Korea in October 2017. </li>
<li>Our valuation analysis suggests base case target price of 31,769 won per share, which is 38% higher than the high end of the IPO price range of 23,000 won.</li>
</ul>


Millie's Library is trying to complete its IPO again in September 2023, after a failed attempt in November 2022. The IPO price range is from 20,000 won to 23,000 won.
Founded in 2016, Millie's Library is a reading platform company that introduced the first monthly e-book subscription service in Korea in October 2017. 
Our valuation analysis suggests base case target price of 31,769 won per share, which is 38% higher than the high end of the IPO price range of 23,000 won.


Event-Driven

<p>In this insight, we discuss the end of the one month lock up period and more block selling ahead by major investors for KakaoBank in the months ahead. The one month lock up period will end on 6 September for KakaoBank and some institutional investors may try to take some profits. </p><p><strong>There are 3.14 million shares that will no longer be under the lock up period for KakaoBank starting 6 September, which represents 0.7% outstanding shares.</strong></p><p><em>In addition, among the three largest shareholders of KakaoBank, we believe that there is an increasing probability of Korea Investment Asset Mgmt and KB Bank trying to unload partial stakes in KakaoBank once the 6 months lock-up period is over. </em></p>

In this insight, we discuss the end of the one month lock up period and more block selling ahead by major investors for KakaoBank in the months ahead. The one month lock up period will end on 6 September for KakaoBank and some institutional investors may try to take some profits. There are 3.14 million shares that will no longer be under the lock up period for KakaoBank starting 6 September, which represents 0.7% outstanding shares.In addition, among the three largest shareholders of KakaoBank, we believe that there is an increasing probability of Korea Investment Asset Mgmt and KB Bank trying to unload partial stakes in KakaoBank once the 6 months lock-up period is over. 

KakaoBank - End of the 1 Month Lock Up Period & More Block Selling Ahead Likely by Major Investors

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

<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?

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>Kakao Bank (KB), South Korea’s largest digital bank, raised up to US$2.2bn in its South Korean IPO. Kakao will hold a 27.26% stake post listing. The share will begin to trade on 6th Aug 2021.</p></div><div><p>Even though Kakao started operations only in July 2017, by 2020 it had already garnered more than 1% market share of overall loans and deposits in South Korea. KB’s loans have grown by 138% over 2018 to 1Q21 to reach KRW21.6tn, while its deposits have grown by 197% over the same period to reach KRW24.2tn. </p></div><div><p>Over 2018-20, its total income (Net interest income plus net fee income) grew by 216%, while it went from booking a loss in 2018 to reporting a 26% profit margin by 2020. KB’s total income was up another 60% YoY in 1Q21, while PAT was up 153% YoY.</p></div><div><p>We have covered various aspects of the deal in our previous notes, <a href="https://www.smartkarma.com/insights/kakao-bank-ipo-riding-on-parent-s-network-but-boundaries-with-kakao-pay-remain-unclear" target="_blank" rel="noopener">Kakao Bank IPO - Riding on parents network but boundaries with Kakao Pay remain unclear</a>, <a href="https://www.smartkarma.com/insights/kakao-bank-ipo-pricey-as-it-should-be" target="_blank" rel="noopener">Kakao Bank IPO - Pricey as It Should Be </a>and <a href="https://www.smartkarma.com/insights/kakao-bank-ipo-lack-of-lock-up-and-msci-ftse-index-implications" target="_blank" rel="noopener">Kakao Bank IPO - Lack of Lock-Up and MSCI, FTSE Index Implications</a>.</p></div><div><p>In this note, we will talk about the deal's trading dynamics.</p></div>

Kakao Bank (KB), South Korea’s largest digital bank, raised up to US$2.2bn in its South Korean IPO. Kakao will hold a 27.26% stake post listing. The share will begin to trade on 6th Aug 2021.Even though Kakao started operations only in July 2017, by 2020 it had already garnered more than 1% market share of overall loans and deposits in South Korea. KB’s loans have grown by 138% over 2018 to 1Q21 to reach KRW21.6tn, while its deposits have grown by 197% over the same period to reach KRW24.2tn. Over 2018-20, its total income (Net interest income plus net fee income) grew by 216%, while it went from booking a loss in 2018 to reporting a 26% profit margin by 2020. KB’s total income was up another 60% YoY in 1Q21, while PAT was up 153% YoY.We have covered various aspects of the deal in our previous notes, Kakao Bank IPO - Riding on parents network but boundaries with Kakao Pay remain unclear, Kakao Bank IPO - Pricey as It Should Be and Kakao Bank IPO - Lack of Lock-Up and MSCI, FTSE Index Implications.In this note, we will talk about the deal's trading dynamics.

Kakao Bank IPO Trading - One for Instis, Closer Look at FTSE and MSCI Inclusion. Remain Buyers

<p>Kakao Bank (KB), South Korea’s largest digital bank, aims to raise up to US$2.2bn in its South Korean IPO. Kakao held a 31.62% stake prior to listing.</p><p>Even though Kakao started operations only in July 2017, by 2020 it had already garnered more than 1% market share of overall loans and deposits in South Korea. KB’s loans have grown by 138% over 2018 to 1Q21 to reach KRW21.6tn, while its deposits have grown by 197% over the same period to reach KRW24.2tn. </p><p>Over 2018-20, its total income (Net interest income plus net fee income) grew by 216%, while it went from booking a loss in 2018 to reporting a 26% profit margin by 2020. KB’s total income was up another 60% YoY in 1Q21, while PAT was up 153% YoY.</p><p>We have covered various aspects of the deal in our previous note, <a href="https://www.smartkarma.com/insights/kakao-bank-ipo-riding-on-parent-s-network-but-boundaries-with-kakao-pay-remain-unclear" target="_blank" rel="noopener">Kakao Bank IPO - Riding on parents network but boundaries with Kakao Pay remain unclear</a>.</p><p>In this note, we will talk about our earnings estimates and valuation and other issues that will impact the deal.</p>

Kakao Bank (KB), South Korea’s largest digital bank, aims to raise up to US$2.2bn in its South Korean IPO. Kakao held a 31.62% stake prior to listing.Even though Kakao started operations only in July 2017, by 2020 it had already garnered more than 1% market share of overall loans and deposits in South Korea. KB’s loans have grown by 138% over 2018 to 1Q21 to reach KRW21.6tn, while its deposits have grown by 197% over the same period to reach KRW24.2tn. Over 2018-20, its total income (Net interest income plus net fee income) grew by 216%, while it went from booking a loss in 2018 to reporting a 26% profit margin by 2020. KB’s total income was up another 60% YoY in 1Q21, while PAT was up 153% YoY.We have covered various aspects of the deal in our previous note, Kakao Bank IPO - Riding on parents network but boundaries with Kakao Pay remain unclear.In this note, we will talk about our earnings estimates and valuation and other issues that will impact the deal.

South Korea

YES24 Co.,Ltd is an on-line retailer.  The company markets and sells books. The company also provides online advertising service.

Yes24 Co Ltd (053280 KS)

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Kakao Bank (KB), South Korea’s largest digital bank, aims to raise up to US$2.2bn in its South Korean IPO. Kakao held a 31.62% stake prior to listing.

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