8th Place Hyundai Motor and 7 Trillion Won Gap... Could Increase Further
On the 9th, the KOSPI index showed a downward trend in the early session due to selling pressure from institutions and foreigners, as dealers were busy in the Hana Bank dealing room in Euljiro, Seoul. KakaoBank, on its second day of listing, surged sharply and entered the top 10 in market capitalization. Photo by Moon Honam munonam@
[Asia Economy Reporter Song Hwajeong] KakaoBank surpassed Kia and Celltrion to rise to 9th place in KOSPI market capitalization just two days after its listing.
As of 10:35 AM on the 9th, KakaoBank was trading at 85,900 KRW, up 16,100 KRW (23.07%) from the previous day. Its market capitalization exceeded 40 trillion KRW.
KakaoBank, which entered KOSPI on the 6th, closed at the upper limit on its first day of listing, recording a market capitalization of 33.162 trillion KRW and ranking 11th. It also took the lead position among financial holding companies. Rising to 9th place in market capitalization just two days after listing, KakaoBank is about 7 trillion KRW behind 8th place Hyundai Motor, so if the upward trend continues, its ranking could rise further. KakaoBank's market capitalization increased by more than 7 trillion KRW from 33 trillion KRW on the 6th to the morning of the 9th alone.
The gap with existing leading banks has widened further. KB Financial Group has a market capitalization of 22 trillion KRW, and Shinhan Financial Group is in the 20 trillion KRW range. Only by combining the two leading financial holding companies can KakaoBank be barely surpassed. If KakaoBank rises just 10% more, it will exceed the combined market capitalization of the two companies.
KakaoBank was also included early in the Morgan Stanley Capital International (MSCI) index upon listing. MSCI announced on the night of the 6th that KakaoBank would be included in the MSCI. Dongyoung Kim, a researcher at Samsung Securities, said, "Since the market capitalization reached 33 trillion KRW on the first day of listing and the ranking became 11th, inclusion in MSCI was a natural step," adding, "Based on a free float ratio of 11% and the closing price of 69,800 KRW on the 6th, KakaoBank's weight in the Emerging Markets (EM) index is 0.04%, with a supply and demand impact of about 200 billion KRW." The inclusion in the Kakao index is scheduled after the market close on the 20th.
However, since the stock price has risen sharply from the early stages of listing, caution is advised against chasing purchases. Researcher Kim said, "In the past, large IPO stocks that were included early in MSCI often showed irregular fluctuations rather than continuous price increases until the index inclusion date," and added, "Based on the current stock price, KakaoBank's trailing price-to-earnings ratio (PER) is 220 times, which is higher than the banking industry average. Considering this, it is advisable to gradually seek profit-taking opportunities rather than chasing purchases until the index inclusion."
Controversy over KakaoBank's appropriate corporate value remains. Kyunghoe Koo, a researcher at SK Securities, said, "There are many points to praise KakaoBank, such as being a company that will bring reform to the banking industry, recording the highest price-to-book ratio (PBR) in the history of domestic bank stocks, and having a successful digital financial platform," but pointed out, "The problem lies in valuation; it cannot be compared on the same level as existing financial stocks, and currently, there is no objective way to evaluate the corporate value. More discussion is needed regarding KakaoBank's appropriate value in the future."
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