[IPO Microscope] Hanpass Faces Demand Forecasting: What Lies Beneath Its Explosive Top-Line Growth

Overlapping Issues: Accounting Policy Changes and Peer Company Selection Controversy
Large CEO Loans and Ongoing Financial Supervisory Service Investigation

Hanpass, a fintech company specializing in overseas remittance services for foreigners, will begin its demand forecasting for institutional investors this week. The desired public offering price ranges from 17,000 won to 19,000 won per share, with a projected market capitalization of up to approximately 200 billion won. The company plans to list on KOSDAQ following public subscription for general investors scheduled for March 16-17, but its securities registration statement contains several issues investors should carefully review.

Revenue Figures Inflated by Accounting Policy Changes

According to the Financial Supervisory Service’s electronic disclosure system on March 4, Hanpass’s revenue for 2024 is reported to be about 55.3 billion won, marking a 90.6% surge compared to the previous year. This represents explosive top-line growth after posting 21 billion won in 2022 and 29 billion won in 2023. However, these figures include the effects of several accounting policy changes. Hanpass revised its 2022 financial statements as part of the auditor replacement process in 2023 (from Daejoo to Deloitte Anjin). Approximately 2.4 billion won in sales promotion expenses were reclassified as sales allowances (deducted from operating revenue), and starting in 2024, foreign exchange gains and losses are recognized on a gross basis, rather than net, resulting in inflated revenue figures. Hanpass explained, "The year-on-year revenue growth rate for 2024 appears higher than the actual growth rate, excluding the effects of the accounting policy changes, creating an optical illusion."

Throughout 2024, Hanpass borrowed and repaid 53.7 billion won from CEO Kim Kyunghoon in the form of short-term loans. Including Hanpass International (5.6 billion won) and Hanpass Lending (12.8 billion won), both controlled by CEO Kim, a total of 72.1 billion won in funds related to the CEO circulated within just one year. This amount far exceeds half of the company's total assets, which stand at approximately 113.8 billion won. While short-term borrowing may be necessary as part of business operations, a 53.7 billion won personal loan from the CEO in a company with total assets of 113.8 billion won is somewhat unusual. Some point out that this could signal a blurred boundary between the finances of the controlling shareholder and those of the company. In response, Hanpass stated, "Although there have been instances in the past where temporary loans were made from the largest shareholder or related parties to secure operating funds during holidays, such practices have now been replaced by credit lines from financial institutions," adding, "All transactions with related companies are conducted based on business necessity."

Controversy Over the Validity of Peer Company Selection for IPO Pricing

For IPO pricing, Hanpass selected Galaxia Moneytree, Thezen, and Finger as peer companies, applying an average price-to-earnings ratio (PER) of 29.4. The company explained that this was unavoidable, as other companies seen as actual competitors in the market-such as Ininepay, Gmoneytrans, and Global Money Express (GME)-are all unlisted. However, market doubts persist. In the case of Thezen, its public offering price fell below the lower end of the desired price band due to weak demand forecasting when it listed in March 2025. Its current share price remains below the IPO price, raising questions about its suitability as a peer. Another peer, Galaxia Moneytree, is primarily focused on electronic payments (PG), O2O services, and simple payment solutions-businesses that are significantly different from Hanpass, which specializes in overseas remittance.

In May 2024, Hanpass voluntarily reported to the Financial Supervisory Service in August last year that it had violated the deemed public offering regulations of the Capital Markets Act during the sale of existing shares by a specific association. The company failed to submit a securities registration statement even though the actual number of subscribers solicited exceeded 49. An investigation is currently underway, and Hanpass has disclosed the possibility of a fine being imposed. The Financial Supervisory Service has identified this type of violation as a 'major case' in its 2024 disclosure violation report and has announced strict measures, so investors should pay close attention to the potential timing and severity of any sanctions.

This content was produced with the assistance of AI translation services.