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| KakaoBank CEO Yun Ho-young speaks in an online press event held July 20. Yonhap |
By Kim Bo-eun
Local securities firms continue to issue views that internet-only KakaoBank's initial public offering (IPO) price is overvalued.
BNK Securities is the latest brokerage to offer this view, with its analyst, Kim In, presenting KakaoBank's target price at 24,000 won, significantly lower than the IPO price of 39,000 won. The analyst recommended investors to sell the stock.
The online bank began receiving subscriptions from retail investors for its shares, Monday. Investors are able to sign up for subscriptions through Tuesday.
"For the high premium to be justified, an expansion of non-interest income is essential, but this appears difficult when considering the local circumstances," the analyst said in a report, Monday.
Kim recommended retail investors to refrain from signing up for KakaoBank stock subscriptions and instead proposed currently undervalued existing banking stocks as a safer investment.
Earlier, Yuanta Securities analyst Chung Tae-joon stated, "KakaoBank's IPO price is excessive when considering its return on equity."
"Online-based operations are simply a different way of operating and this does not change the core business," in a report.
Meritz Securities analyst Eun Kyung-wan said, "The bank insisted that the price has been set considering the industry, scale, financials and similarities in business (with other global internet banks), but comparing overseas-based businesses in digital financial services, without considering the characteristics of the financial services in each country and the intensity of the regulations of financial authorities, is basically arguing from a self-centered angle."
The online banking affiliate of Kakao drew its corporate value not referring to that of local peers, but referring to those of financial platform operators in other countries, such as U.S. mortgage platform Rocket Companies, Brazilian digital payment services provider Pagseguro Digital, Swedish digital bank Nordnet AB and Russian online financial services provider TSC Group Holding.
In a recent press conference, the bank's CEO Yun Ho-young refuted views that its IPO price was overvalued. "Our profit model and growth vision as a provider of smartphone-mediated online financial services are clearly different from other listed commercial lenders. We are responsible for a whole different sector of services that do not overlap with other lenders," he told reporters at that time.
KakaoBank, launched in July 2017, had over 13.35 million monthly active users as of June this year. The popularity of the online bank was backed by the public's familiarity with Kakao, given that it operates the nation's dominant mobile messenger.
KakaoBank is set to raise 2.66 trillion won ($2.3 billion) via its listing on the main bourse on Aug. 6. Its market capitalization is expected to reach 18.6 trillion won, which is only slightly below the No. 2-ranking Shinhan Financial Group's market cap of 19.8 trillion won.
