From K bank to Shift Up, major players to heat up IPO market

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South Korea's initial public offering market is set to maintain its momentum in the latter half of the year, driven by the stock market recovery, as well as the successful listings of big names earlier this year.

Having shaken off last year's slump, the total amount raised through IPOs stood at 1.6 trillion won ($1.16 billion) as of end-May, accounting for over 40 percent of the previous year's annual total of 3.86 trillion won. Just in June, an additional 700 billion won is expected to flood into the market, surpassing the historical monthly average of 288 billion won.

The second half of the year is anticipated to witness more high-profile deals with valuations reaching into the trillions, particularly as companies that previously deferred or abandoned their IPO plans due to market conditions return for a second attempt.

 

Shift Up

The maker of global hits "Goddess of Victory: Nikke" and "Stellar Blade," Shift Up is preparing to make its market debut next month, with its public subscriptions set to happen on July 2-3 and demand forecast set to take place June 3-27.

Established in 2013 by former NCSoft graphic designer Kim Hyung-tae, Shift Up skyrocketed to prominence with its 2022 mobile title "Nikke," which amassed 1 trillion won in sales by the first quarter of this year. In April, the company introduced the PlayStation action game "Stellar Blade," garnering worldwide acclaim and claiming the top spot in weekly sales charts in Japan and the US.

With a target price range between 47,000 won and 60,000 won, Shift Up's valuation has the potential to reach up to 3.5 trillion won. The company aims to issue a total of 59.4 million shares, including 7.25 million newly issued shares through the public offering.

Shift Up's successful listing would hold significance for the equity market and the game industry. If the market debut proceeds as planned, it will signify the first IPO by a Korean developer in two years and the first on the main Kospi bourse since Krafton in 2021. So far, only two companies, Netmarble and Krafton, have gone straight to the Kospi. With a valuation of 3.5 trillion won, Shift Up would immediately claim the fourth position in the industry, trailing behind Krafton, Netmarble and NCSoft.

 

K bank

Another high-profile IPO in the latter half will be internet-only K bank.

After scrapping its initial attempt last year due to a subdued investment environment, the bank resumed the IPO process this year, selecting NH Investment & Securities and KB Securities as its IPO underwriters in February.

It plans to apply for a preliminary listing review with the Korea Exchange this month, aiming to list its shares on the local stock market within the year.

Industry watchers project the bank could be valued at around 5 trillion won, lower than the 7 to 8 trillion won valuation from two years ago but higher than last year’s market consensus of 4 trillion won, which the firm deemed undervalued.

"K bank is expected to go public around the end of this year, with its equity expected to exceed 2 trillion won. Considering its growth potential, the company's valuation could reach up to 5.4 trillion won," commented analyst Park Hye-jin of Daishin Securities.

This year, K bank has seen progress in both its customer base and performance. In February, it reached 10 million customers and added another million in just over three months. Its first-quarter net profit hit a record 50.7 billion won, surging nearly 400 percent from the previous year.

 

Theborn Korea

Celebrity chef Paik Jong-won's food franchise, Theborn Korea, is making another attempt at floating its shares on the market.

Last month, the company resumed its IPO process by applying for a preliminary listing review with the KRX after a six-year delay. Initially planned for 2018, with the listing scheduled two years later, the company's IPO was halted due to COVID-19's impact on performance.

With improved performance, the IPO plans are back on track. Last year, the company achieved record sales of 410.7 billion won, a 46 percent increase from the previous year, with operating profit remaining stable at 25.6 billion won. With significant menu price adjustments this year, it is expected to have record sales.

Founded in 1994, the company currently operates over 2,700 stores across more than 20 dining brands, spanning not only Korea but also seven other countries, including the US, China, Japan and Australia.

Market consensus estimates the company's valuation to be between 350 billion won and 400 billion won.

Paik holds a 76.7 percent stake in the company, making him the largest shareholder. While concerns arise over the lackluster stock performance of franchise companies, Theborn Korea is expected to smoothly pass through the preliminary examination as it is not subject to the risk of Paik and other shareholders selling their shares.

The results of the preliminary listing examination are expected to be announced by the end of July.

By Choi Ji-won(jwc@heraldcorp.com)