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

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Kakao Pay Immediate Float Is Too Tight at 10%: Alipay Exit Possibilities & Indices Fast Entry

Accurate Facts About the Application of Kakao Pay's 135-Day Listing Date Rule

Kakao Bank IPO: Valuation Peer Group Issues & Local Street's General View on Valuation Level

Kakao Pay IPO: Index Fast Entry Possibilities

The Blockchain Delusion. A (Mostly) Bearish Investment Thesis.

Gravity Works As WeWork Doesn't; Now Plan B

Clepsydra Capital

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

Equity Capital Markets

<div><div><h2>Offering size</h2></div></div><div>
<p>Kakao Pay offers 17M shares, which account for 15% of the pre-IPO total shares, of which 55-75% are allocated to institutions.</p>
<div class="content-highlight">
<p><strong>Who is Kakao Pay?</strong></p>
<p>Launched on September 5, 2014, it is a remittance and payment service simply by entering your password after registering your credit and debit card information in KakaoTalk.</p>
<p><iframe src="https://www.youtube.com/embed/vjhmJaeI5ZI" width="640" height="360" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
</div>
</div><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
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<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Offering size"}'>Offering size</td></tr>
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<td data-sheets-value='{"1":2,"2":"Ticker"}' data-sheets-formula="=R[-45]C[0]">Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"377300"}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-45]C[0]">377300</td>
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<td data-sheets-value='{"1":2,"2":"Bourse"}' data-sheets-formula="=R[-45]C[0]">Bourse</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSPI"}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-45]C[0]">KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering"}'><strong>Offering</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":17000000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-42]C[0]"><strong>17,000,000</strong></td>
</tr>
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<td data-sheets-value='{"1":2,"2":"- % of pre-IPO SO"}'><strong>- % of pre-IPO SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.14995528906638497}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-40]C[0]"><strong>15.00%</strong></td>
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<td data-sheets-value='{"1":2,"2":"Institutional allotment"}'><strong>Institutional allotment</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"55.00~75.00%"}'><strong>55.00~75.00%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Split</h2><p>This is a 100% primary offering. As a result, this offering will see a capital increase rate of 15% with a shareholding dilution of 13.04%. This IPO is free of any additional options: cornerstone, clawback, or greenshoe.</p><table class="table table-striped">
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<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Split"}'>Split</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Primary %"}'><strong>Primary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-42]C[0]"><strong>100.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Secondary %"}'>Secondary %</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[-41]C[0]">0.00%</td>
</tr>
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<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'><strong>Capital increase rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.14995528906638497}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-39]C[0]"><strong>15.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'><strong>Dilution</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.13040097340491325}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-39]C[0]"><strong>13.04%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><div><div><h2>Schedule</h2></div></div><div>
<p>The book opens on July 29 (for both local and overseas investors) and runs for two days until July 30. The allotment will be on August 2 as finalizing the offering price. We have the subscription on August 4.</p>
<table class="table table-striped">
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<col width="200">
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<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Schedule"}'>Schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book open"}'><strong>Book open</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44406}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 7. 29</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book close"}'>Book close</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44407}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 7. 30</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Allotment"}'><strong>Allotment</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44410}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 8. 2</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription"}'><strong>Subscription</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44412}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 8. 4</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44417}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 8. 9</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"TBA"}'>TBA</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
</div><div><div><h2>Pricing</h2></div></div><div>
<p>Kakao Pay used the relative value calculation through the growth-adjusted EV/Sales evaluation method. And the valuation peer group includes Paypal, Square, and PagSeguro Digital.</p>
<table class="table table-striped">
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<col width="150">
<col width="150">
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<td data-sheets-value='{"1":2,"2":"Valuation peers: Growth-adjusted EV/Sale"}'>Valuation peers: Growth-adjusted EV/Sale</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Paypal Holdings Inc"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Paypal Holdings Inc</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Square Inc"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Square Inc</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"PagSeguro Digital Ltd"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>PagSeguro Digital Ltd</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"PYPL"}' data-sheets-formula='="PYPL"'>PYPL</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SQ"}' data-sheets-formula='="SQ"'>SQ</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"PAGS"}' data-sheets-formula='="PAGS"'>PAGS</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Enterprise value (EV)"}'>Enterprise value (EV)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":315.369}' data-sheets-numberformat='{"1":2,"2":"$#,##0.0B","3":1}'>$315.4B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":102.447}' data-sheets-numberformat='{"1":2,"2":"$#,##0.0B","3":1}'>$102.4B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":16.865}' data-sheets-numberformat='{"1":2,"2":"$#,##0.0B","3":1}'>$16.9B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Annualized sales based on 1Q21 sales"}'>Annualized sales based on 1Q21 sales</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":24.132}' data-sheets-numberformat='{"1":2,"2":"$#,##0.0B","3":1}'>$24.1B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":20.229}' data-sheets-numberformat='{"1":2,"2":"$#,##0.0B","3":1}'>$20.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.511}' data-sheets-numberformat='{"1":2,"2":"$#,##0.0B","3":1}'>$1.5B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EV/Sales multiple"}'>EV/Sales multiple</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":13.068498259572353}' data-sheets-numberformat='{"1":2,"2":"0.00x"}'>13.07x</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.064363043155866}' data-sheets-numberformat='{"1":2,"2":"0.00x"}'>5.06x</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11.161482461945731}' data-sheets-numberformat='{"1":2,"2":"0.00x"}'>11.16x</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Sales growth rate"}'>Sales growth rate</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.16}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>16.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.83}' data-sheets-numberformat='[null,3,"0.00%",1]'>83.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.24}' data-sheets-numberformat='[null,3,"0.00%",1]'>24.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Growth rate adjustment coefficient (EV/Sales multiple / Sales growth rate)"}'><strong>Growth rate adjustment factor (EV/Sales multiple ÷ Sales growth rate)</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":81.6781141223272}' data-sheets-numberformat='{"1":2,"2":"0.00x"}' data-sheets-formula="=R[-2]C[0]/R[-1]C[0]"><strong>81.68x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6.101642220669718}' data-sheets-numberformat='{"1":2,"2":"0.00x"}' data-sheets-formula="=R[-2]C[0]/R[-1]C[0]"><strong>6.10x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":46.50617692477388}' data-sheets-numberformat='{"1":2,"2":"0.00x"}' data-sheets-formula="=R[-2]C[0]/R[-1]C[0]"><strong>46.51x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Average"}'><strong>Average</strong></td>
<td colspan="3" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":44.7619777559236}' data-sheets-numberformat='{"1":2,"2":"0.00x"}' data-sheets-formula="=average(R[-1]C[0]:R[-1]C[2])"><strong>44.76x</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
</div><div><div>This valuation is a bit difficult. Growth-adjusted EV/Sales is calculated by applying Kakao Pay's 1Q21 based annualized sales to the growth-adjusted EV/Sales multiple, reflecting the growth rate adjustment factor.</div></div><div><table class="table table-striped">
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<col width="200">
<col width="150">
<col width="150">
</colgroup>
<tbody>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Kakao Pay: Growth-adjusted EV/Sale"}'>Kakao Pay: Growth-adjusted EV/Sale</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Sales growth rate"}'>Sales growth rate</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.834}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>83.40%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A"}'>A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Growth rate adjustment coefficient (EV/Sales multiple / Sales growth rate)"}'>Growth rate adjustment factor (EV/Sales multiple <strong>÷</strong> Sales growth rate)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44.7619777559236}' data-sheets-numberformat='{"1":2,"2":"0.00x"}' data-sheets-formula="=R[-5]C[0]">44.76x</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Growth-adjusted EV/Sales multiple"}'>Growth-adjusted EV/Sales multiple</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":37.33148944844028}' data-sheets-numberformat='{"1":2,"2":"0.00x"}' data-sheets-formula="=R[-1]C[0]*R[-2]C[0]">37.33x</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C = A X B"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>C = A X B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Annualized sales based on 1Q21 sales"}'>Annualized sales based on 1Q21 sales</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":428.575}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>₩428.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"D"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>D</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Enterprise value (EV)"}'>Enterprise value (EV)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":15971.899}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>₩15,971.9B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"E = C X D"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>E = C X D</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Net debt"}'>Net debt</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-647.284}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>-₩647.3B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"F"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>F</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Market cap"}'><strong>Market cap</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":16619.183}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-2]C[0]-R[-1]C[0]"><strong>₩16,619.2B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"G = E - F"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'><strong>G = E - F</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Number of diluted shares after IPO"}'>Number of diluted shares after IPO</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":135880810}' data-sheets-numberformat='[null,2,"#,##0",1]'>135,880,810</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"H"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>H</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price per share"}'><strong>Price per share</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":122307.0645516464}' data-sheets-numberformat='[null,4,"[$₩]#,##0",1]' data-sheets-formula="=R[-2]C[0]*1000000000/R[-1]C[0]"><strong>₩122,307</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"I = G / H"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'><strong>I = G / H</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table></div><div><div><div>A 21.51~48.49% discount sets up an indicative price band of ₩63,000~96,000, suggesting a market cap of ₩8.21~12.52T.</div></div></div><div><table class="table table-striped">
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<col width="150">
<col width="150">
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<td data-sheets-value='{"1":2,"2":"Indicative price band"}'>Indicative price band</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Low"}'>Low</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"High"}'>High</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price"}'><strong>Price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":63000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]'><strong>₩63,000</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":96000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]'><strong>₩96,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Base deal size"}'>Base deal size</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1071}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R8C2/1000000000">₩1,071.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1632}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R8C2/1000000000">₩1,632.0B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Institutional allotment"}'>- Institutional allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":589.0500000000001}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R12C2">₩589.1B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":897.6}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R12C2">₩897.6B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Implied market cap"}'><strong>Implied market cap</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":8213.128875}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]*130367125/1000000000"><strong>₩8,213.1B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":12515.244}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]*130367125/1000000000"><strong>₩12,515.2B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Discount"}'><strong>- Discount</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.48490301659233187}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R20C2-R[-4]C[0])/R20C2"><strong>48.49%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.21509031099783904}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R20C2-R[-4]C[0])/R20C2"><strong>21.51%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table></div><div><div><div></div></div></div>

Offering size
Kakao Pay offers 17M shares, which account for 15% of the pre-IPO total shares, of which 55-75% are allocated to institutions.

Who is Kakao Pay?
Launched on September 5, 2014, it is a remittance and payment service simply by entering your password after registering your credit and debit card information in KakaoTalk.








Offering size

Ticker
377300


Bourse
KOSPI


Offering
17,000,000


- % of pre-IPO SO
15.00%


Institutional allotment
55.00~75.00%

Source: DART

SplitThis is a 100% primary offering. As a result, this offering will see a capital increase rate of 15% with a shareholding dilution of 13.04%. This IPO is free of any additional options: cornerstone, clawback, or greenshoe.





Split

Primary %
100.00%


Secondary %
0.00%


Capital increase rate
15.00%


Dilution
13.04%

Source: DART

Schedule
The book opens on July 29 (for both local and overseas investors) and runs for two days until July 30. The allotment will be on August 2 as finalizing the offering price. We have the subscription on August 4.






Schedule

Book open
2021. 7. 29


Book close
2021. 7. 30


Allotment
2021. 8. 2


Subscription
2021. 8. 4


Payment
2021. 8. 9


Listing
TBA

Source: DART


Pricing
Kakao Pay used the relative value calculation through the growth-adjusted EV/Sales evaluation method. And the valuation peer group includes Paypal, Square, and PagSeguro Digital.









Valuation peers: Growth-adjusted EV/Sale
Paypal Holdings Inc
Square Inc
PagSeguro Digital Ltd


Ticker
PYPL
SQ
PAGS


Enterprise value (EV)
$315.4B
$102.4B
$16.9B


Annualized sales based on 1Q21 sales
$24.1B
$20.2B
$1.5B


EV/Sales multiple
13.07x
5.06x
11.16x


Sales growth rate
16.00%
83.00%
24.00%


Growth rate adjustment factor (EV/Sales multiple ÷ Sales growth rate)
81.68x
6.10x
46.51x


Average
44.76x

Source: DART


This valuation is a bit difficult. Growth-adjusted EV/Sales is calculated by applying Kakao Pay's 1Q21 based annualized sales to the growth-adjusted EV/Sales multiple, reflecting the growth rate adjustment factor.






Kakao Pay: Growth-adjusted EV/Sale

Sales growth rate
83.40%
A


Growth rate adjustment factor (EV/Sales multiple ÷ Sales growth rate)
44.76x
B


Growth-adjusted EV/Sales multiple
37.33x
C = A X B


Annualized sales based on 1Q21 sales
₩428.6B
D


Enterprise value (EV)
₩15,971.9B
E = C X D


Net debt
-₩647.3B
F


Market cap
₩16,619.2B
G = E - F


Number of diluted shares after IPO
135,880,810
H


Price per share
₩122,307
I = G / H

Source: DART

A 21.51~48.49% discount sets up an indicative price band of ₩63,000~96,000, suggesting a market cap of ₩8.21~12.52T.







Indicative price band
Low
High


Price
₩63,000
₩96,000


Base deal size
₩1,071.0B
₩1,632.0B


- Institutional allotment
₩589.1B
₩897.6B


Implied market cap
₩8,213.1B
₩12,515.2B


- Discount
48.49%
21.51%

Source: DART



Kakao Pay IPO: Offering Detail & Valuation Issues

Kakaopay

Kakao Pay IPO: Offering Detail & Valuation Issues