Will KT succeed in listing Millie's Library?

KT CEO Ku Hyeon-mo bangs his gavel during the general meeting of shareholders at the company's R&D center in Seoul in this March 31 file photo. Courtesy of KT

By Park Jae-hyuk

Attention has been focused on whether or not KT will be able to list Millie's Library on the tech-heavy Kosdaq market by the end of the year as planned, as a growing number of companies are scrapping their plans to go public in light of the stock market slowdown.

The telecommunications company said Sunday that it applied for a preliminary review by the Korea Exchange for the initial public offering (IPO) of the e-book subscription service provider which had been acquired last September by KT's subsidiary, Genie Music.

Its latest IPO bid came after at least six companies dropped their plans to go public this year, following their failure to attract institutional investors in their demand forecasting sessions. Among the six companies are SK Shieldus and One Store, both of which are subsidiaries of SK Square, which was spun-off from SK Telecom, the main competitor of KT.

In 2021, Millie's Library suffered a 14.5 billion won ($11.5 million) operating loss.

Given that it has never made a profit since the launch of its service six years ago, KT has been trying to capitalize on the financial regulator's special guidelines that allow promising startups to go public, even if they are not making a profit.

Last October, Millie's Library CEO Seo Young-taek told reporters that he expects his company's valuation to reach 1 trillion won ($795 million) in the long run, but most securities market insiders currently estimate it at 300 billion won.

Unless the e-book platform provider goes public successfully, KT is expected to adjust its plan to list multiple other subsidiaries within the next few years.

KT CEO Ku Hyeon-mo said in March that his company sought to list Millie's Library and the internet-only K bank by the end of this year at the earliest. He also indicated his company's intention to list KT Studio Genie, BC Card and KT Cloud in the near future.

However, there is speculation that K bank's IPO will be delayed for a while, considering the falling market cap of KakaoBank, the nation's largest internet-only bank, and worsening investor sentiment on the cryptocurrency market. K bank's earnings have relied heavily on its partnership with Upbit, the nation's largest cryptocurrency exchange.

“KT differs from SK Square, which is supposed to list its subsidiaries by deadline in accordance with the agreements with its investors,” eBest Investment & Securities analyst Lee Seung-woong said. “KT is not expected to push ahead with their IPOs, if the market is sluggish.”