KakaoBank becomes 12th-largest market cap company on KOSPI

Customers visit a branch of a local brokerage firm during KakaoBank's stock allotment subscription period in late July. Yonhap

Foreign investors' buying power led KakaoBank's 29.98 percent increase on first day

By Anna J. Park

KakaoBank was listed on the KOSPI, Friday, in one of most expected IPOs of the year, and ended the day with a positive performance. The internet-only bank's initial price was set at 53,700 won at the beginning of Friday's session, 37.7 percent higher than the offering price of 39,000 won. Despite failing to reach its maximum possible start ― a 200 percent jump ― the stock continued to move upward, finishing at 69,800 won ($61.09), a 29.98 percent jump.

At the start of trading, its share price fell to 51,000 won at 9:02 a.m., however, the price later soared to 68,000 won in the space of 10 minutes, reached 69,400 won at 1:23 p.m., and finished at 69,800 won, the highest movement of the day.

KakaoBank's market cap ended up at 33.16 trillion won, the 12th highest among KOSPI-listed companies ― larger than POSCO's 29.7 trillion won and LG Electronics's 25.6 trillion won. It also exceeded that of KB Financial Group, the country's largest financial group, which stands at 21.7 trillion won or 20th on the KOSPI. Market watchers still view this as excessive, as it sets KakaoBank's PBR at 3.43, seven times higher than KB Financial's 0.49.

"It's absurd that KakaoBank's market cap is some 34 trillion won, when considering the aggregate amount of all listed banks in Korea is 74 trillion won," a report published by BNK Securities stated.

However, the caustic report also acknowledged that the internet-only bank has more than 13.3 million users of its mobile application ― beating out any of the banks' individual customers. KakaoBank also holds the largest market share for mobile money transfer services at 17 percent.

Based on such impressive numbers, some analysts see further growth for the bank.

"During the month of March 2021, the number of KakaoBank's users stood at 16 million. The mobile banking app's monthly active users (MAU) was 13.3 million, which is an average growth of 59.2 percent since the bank's launch in 2017. Considering the bank's network effect and lock-in effect with KakaoTalk, the country's number one application in terms of an MAU of 41.7 million, the mobile-only bank's expansionary potential has just started," Kim Ji-young, an analyst at Kyobo Securities, said.

The analyst also thinks highly of the fact that 45 percent of the bank's entire staff are IT experts, which makes a flexible in-house IT development system possible.

Overall, foreign investors' buying led the rally for KakaoBank, Friday, as they net purchased 415 billion won worth of shares, along with institutional investors who net purchased 116 billion won worth. Retail investors net sold 493 billion won worth of stock.

The amount of daily transactions was also the highest for a Friday session on the KOSPI, with over 3.09 trillion won worth of transactions as of 3 p.m. ― four times higher than that of the country's number one market cap company Samsung Electronics.

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