Digital Insurance Companies May Be Established Within the Year
MyData Review Also Gradually Accelerating
[Asia Economy Reporter Sung Ki-ho] Kakao Pay, which has shown a remarkable growth trajectory, is ready to shake up the financial market. The green light has been given for its long-awaited personal credit information management (MyData) business license, and the preliminary approval review for establishing a digital non-life insurance company, which had been at a standstill, is also imminent. Expectations for Kakao Pay's year-end initial public offering (IPO), which has entered the listing process, are also rising.
According to the financial sector on the 28th, the Financial Services Commission is expected to put the agenda for preliminary approval of Kakao Pay's digital non-life insurance company establishment on the regular meeting scheduled for the afternoon. Once approved by the Financial Services Commission, the first digital non-life insurer combining ICT and insurance by a big tech (large information and communication company) will be launched.
Previously, Kakao Pay attempted to establish a digital non-life insurance company jointly with Samsung Fire & Marine Insurance in 2019, but the plan fell through due to differing opinions. Subsequently, in December last year, Kakao Pay applied for preliminary approval as a comprehensive non-life insurer and embarked on an independent path to establish a digital non-life insurance company. Upon receiving preliminary approval, Kakao Pay must meet the insurance business licensing requirements within six months and apply for the final license. If the approval process proceeds smoothly, industry insiders expect the launch of Kakao Pay's digital non-life insurance company by the end of this year.
The review of the MyData business, which had been on hold, is also expected to be unshackled soon. MyData is one of Kakao Pay's long-cherished projects. Although it applied for preliminary approval for MyData in December last year, it encountered obstacles due to the major shareholder eligibility issue of Alipay Singapore Holding, an Ant Group affiliate holding 43.9% of shares. At that time, the financial authorities sent a letter to the People's Bank of China to inquire whether Alipay had been subject to any legal sanctions but received no substantial response, leading to the suspension of the review. Recently, the Financial Services Commission and the Financial Supervisory Service are reportedly engaging in multifaceted contacts with Chinese authorities.
Once the major shareholder eligibility issue is resolved, Kakao Pay is expected to resume MyData-related services promptly. The MyData review period takes two months for preliminary review and one month for the main review, but if all facility and personnel requirements are met, it can proceed directly to the main review and be completed within one month. The financial authorities have announced that they will accept MyData review applications monthly.
Market Value Exceeds 10 Trillion Won... Growing Expectations for IPO
The listing process is also progressing smoothly. On the 26th, Kakao Pay submitted a preliminary review application for listing to the Korea Exchange's KOSPI Market Headquarters. Considering that the preliminary review period usually takes about two months, Kakao Pay is expected to pass the review and enter the IPO process as early as the end of June. The lead underwriter is Samsung Securities.
Internally, Kakao Pay values the company at up to 17 trillion won at the time of listing. According to the securities industry, when Kakao Pay applied for the preliminary review, the planned public offering amount and the desired offering price were disclosed. Currently, the underwriter has requested corrections, and the related information has been deleted.
According to the disclosed information, the issue price per share was between 73,700 and 96,300 won, and the planned public offering amount ranged from 1.474 trillion to 1.926 trillion won. The number of shares to be listed is 133,367,125 shares, and the market capitalization immediately after listing is estimated to be between 9.8292 trillion and 12.8433 trillion won. Considering that the offering price is usually calculated with a 20-40% discount, the company value Kakao Pay envisions reaches up to 17 trillion won.
In the market, even with conservative estimates, given the current trend where mega IPOs often set their offering price above the upper limit, the consensus is that Kakao Pay will also be recognized with a corporate value exceeding 13 trillion won. This surpasses the market capitalization of Hana Financial Group, which stood at 13 trillion won as of the 28th. Initially, the securities industry had projected Kakao Pay's expected corporate value could reach up to 18 trillion won.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
