KakaoBank threatening KB's leading status in market cap

KakaoBank's Pangyo office in Seongnam, Gyeonggi Province / Courtesy of KakaoBank

By Park Jae-hyuk

KakaoBank is poised to surpass KB and Shinhan financial groups in terms of market capitalization after its forthcoming initial public offering (IPO) slated for Aug. 6.

The internet-only bank's IPO price was set at the upper end of 39,000 won ($33) per share following Thursday's demand forecasting session that attracted a record-high 2,580 trillion won worth of bids from institutional investors.

As a result, the Kakao subsidiary has been able to go public with an 18.5 trillion won market cap, which is much higher than Hana Financial Group's 13.2 trillion won and Woori Financial Group's 8 trillion won.

Although the online bank's market cap is lower than KB's 21.7 trillion won and Shinhan's 19.8 trillion won at this moment, securities analysts said it does not seem to be difficult for KakaoBank to enjoy a rapid stock price hike after its IPO, which will enable the company to become a bellwether in the nation's banking industry.

KB Financial Group headquarters in Seoul / Courtesy of KB Financial Group

"It is actually difficult to predict KakaoBank's short-term stock price, but its market cap will gradually go up to 31 trillion won, because its IPO price was set at the upper end of the price range as I had expected earlier this month," SK Securities analyst Koo Kyung-hwe said.

Attention is therefore being focused on KakaoBank's upcoming public subscription that will take place from Monday to Tuesday next week. The amount of subscriptions from retail investors will likely help market observers better forecast the bank's stock price after its IPO.

Some analysts, however, did not rule out the possibility of KakaoBank's IPO raising KB's stock price, given that KB Kookmin Bank holds a 9.3 percent stake in the internet-only bank as one of its major shareholders.

"The leading bank is KB, not KakaoBank," Kiwoom Securities analyst Seo Young-soo said in a report, Friday. "KB has been underestimated excessively, considering it has twice as many customers as KakaoBank and has the strongest grip on the domestic market."

The analyst added that KB is expected to earn 1.25 trillion won from KakaoBank's IPO.

KB's stock price, however, rose only 0.77 percent during Friday's session, while the stock prices of other major shareholders of KakaoBank went up further that day.

Yes24, which holds a 1.4 percent stake in KakaoBank, hit the daily ceiling of a 30 percent hike in its stock price, while its holding company, Hansae Yes24 Holdings, also enjoyed a 30 percent rise in its stock price.

Korea Investment Holdings' stock price also soared 9.27 percent. The company holds a 4.67 percent stake in KakaoBank, and its subsidiary, Korea Investment Value Asset Management, owns an additional 27.1 percent stake in the bank.

Kakao, the largest shareholder of KakaoBank with a 31.6 percent stake, saw a 1.36 percent rise in its stock price.

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