[Click eStock] "Kakao Entertainment, Listing Visibility with SM Acquisition"

There is an analysis that Kakao Entertainment's IPO has become more visible.

On the 14th, Hana Securities stated in a report, "We believe that Kakao Entertainment's IPO will become more visible with the acquisition of SM Entertainment."

Kakao Entertainment recorded cumulative sales of 1.4 trillion KRW and a net profit of 84.3 billion KRW in the third quarter of 2022. Hana Securities estimated Kakao Entertainment's annual sales to be 1.9 trillion KRW.

Hana Securities judged that SM's expected sales for 2023 are 983.6 billion KRW and operating profit is 160 billion KRW, and that the financial contribution will be very significant when consolidated.

In January this year, Kakao Entertainment attracted an investment of 1.2 trillion KRW, being valued at 11.3 trillion KRW by Singapore Investment Corporation (GIC) and Saudi Arabia's Public Investment Fund (PIF).

Hana Securities mentioned, "There was a burden regarding the valuation for the IPO, and it is expected that this acquisition will relieve the valuation burden."

They added, "The business division expected to generate the most immediate synergy after acquiring SM is estimated to be the webtoon and web novel business."

HYBE has collaborated with Naver to release webtoons and web novels inspired by artists such as BTS, ENHYPEN, and TOMORROW X TOGETHER.

The BTS webtoon "Seven Fates: CHAKHO" was simultaneously released in 10 languages worldwide and recorded 15 million views in two days, creating a greater impact globally than in Korea.

Yoon Yeji, a researcher at Hana Securities, forecasted, "If SM and Kakao Entertainment's story businesses combine, they could achieve significant marketing effects in new markets such as the United States and Southeast Asian countries."