Kurly and Golfzon County okayed for IPO, but face higher risk to go ahead

[Source: Market Kurly]

Kurly and Golfzon County, notable names remaining in the Korean IPO pipeline for this year, have received a nod from the stock market operator to go public, but whether they will go ahead with initial public offerings is uncertain due to high risks.

The Korea Exchange said Monday that it approved Kurly and Golfzon County’s applications to join the Kospi.

Kurly filed for a preliminary IPO review in late March, but it has taken longer than expected to gain approval due to its unstable shareholder structure and yawning losses. It had to submit additional documents to prove its ability to turn a profit and improve its shareholder structure.

Kurly is the parent of Korea’s online grocery platform Market Kurly, which has pioneered the so-called “dawn delivery" service of fresh foods, or doorstep delivery by 7 a.m. next morning, since its introduction in May 2015.

The company has won the heart of freshness-conscious consumers, but its balance sheet remains in the red. It earned 1.56 trillion won ($1.17 billion) in revenue in 2021 but incurred an operating loss of 213.9 billion won and a net loss of 1.28 trillion won.

Also, Kurly founder and chief executive officer Kim Seul-ah holds only a 6 percent stake in the company as of 2021, making her grip on the company weak. The company is said to have received promises from large stakeholders to have their shares locked up to prevent stock price fall after listing.

[Source: Golfzon County]

Golfzon County, established in January 2018, is the largest indoor golf driving range operator in Korea. It generated 52.2 billion won in operating income on revenue of 191.8 billion won on a separate basis in 2021.

Their arrivals will likely be met with a lukewarm response, given the local IPO market's track record this year that shamed previously anticipated big IPO candidates and scared away more from trying out.

Oil refiner Hyundai Oilbank and app market operator One Store as well as other promising candidates called off listing schemes this year to date. SoCar, a car-sharing platform operator, proceeded with its listing schedule but it had to sharply cut back offering price and volume due to weak investors’ demand. Even so, the stock ended its first trading day, on Aug. 22, 6 percent below the IPO price.

Kurly has already been humbled even before its IPO takeoff. Its enterprise value is estimated at below 2 trillion won, more than halved from 4 trillion won assessed last year when it attracted large pre-IPO investment.

Golfzon County is estimated to be worth around 2 trillion won.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]