Final Subscription Competition Rate 1525 to 1... Record-Breaking Success Streak
On the morning of the 2nd, investors are applying for and consulting on Kakao Games IPO subscriptions at the Korea Investment & Securities branch in Yeouido, Yeongdeungpo-gu, Seoul. [Image source=Yonhap News]
[Asia Economy Reporter Minwoo Lee] Kakao's game-specialized subsidiary, Kakao Games, set a new record with subscription deposits (50% of the total subscription amount) exceeding 58 trillion KRW. The subscription rate also surpassed 1500 to 1, marking a successful launch.
According to the financial investment industry on the 2nd, the subscription deposits gathered by Kakao Games' joint listing underwriters, Korea Investment & Securities, Samsung Securities, and the underwriting company KB Securities, totaled 58.5543 trillion KRW. Korea Investment & Securities, which was allocated the largest volume (1.76 million shares), attracted 32.6627 trillion KRW, surpassing the previous IPO subscription deposit record of 30.9899 trillion KRW (SK Biopharm). Samsung Securities, allocated 1.28 million shares, gathered 22.9694 trillion KRW, and KB Securities, allocated 160,000 shares, collected 2.9222 trillion KRW.
The combined subscription rate across the three securities firms was 1524.85 to 1, nearly four times the previous day's 427.45 to 1. Of the total public offering volume of 16 million shares, 20% (3.2 million shares) were allocated for general investors, with subscription applications totaling 4.87952 billion shares. By securities firm, Korea Investment & Securities recorded the highest rate at 1546.53 to 1, followed by Samsung Securities at 1495.40 to 1, and KB Securities at 1521.94 to 1.
This year, only Iruda (3039.56 to 1, the highest ever), Hankook Pharma (2035.74 to 1), and TSI (1621.1 to 1) have recorded demand forecast subscription rates above 1000 to 1. However, their public offering amounts were limited to around 13.5 to 18.5 billion KRW. Given that Kakao Games is a large-cap stock with a public offering amount of 384 billion KRW, this level of subscription rate is considered exceptional.
With the subscription rate exceeding 1500 to 1, receiving an allocation of Kakao Games shares has become as difficult as "picking stars from the sky." For example, a deposit of 100 million KRW (8,300 shares at the public offering price of 24,000 KRW) results in an allocation of only 5 shares. Even if the stock achieves a "ttasang" (opening price at double the public offering price followed by a limit-up) on the first day of listing, selling on the same day would yield a price gain of about 190,000 KRW.
In the securities industry, the appropriate stock price level for Kakao Games is forecasted to be around 30,000 KRW. Daishin Securities set a target price of 33,000 KRW, 37.5% higher than the public offering price, applying a price-earnings ratio (PER) of 20 times considering the diverse new game lineups and various business capabilities. Meritz Securities calculated a 12-month fair price of 32,000 KRW. Considering Kakao Games' game business value, investment assets, and net cash, the corporate value is estimated at around 2.3 trillion KRW. KTB Investment & Securities suggested a fair corporate value of 2.1 trillion KRW and a fair stock price of 28,000 KRW. These forecasts show some difference in tone compared to SK Biopharm. Previously, SK Biopharm recorded a "ttasang" on the first day of listing and soared to 269,000 KRW within four trading days, a 550% increase compared to the public offering price of 49,000 KRW.
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