Gaming Firm Krafton's Planned IPO Drawing Investor Interest | Be Korea-savvy

Gaming Firm Krafton’s Planned IPO Drawing Investor Interest

A photo capture from the Facebook account of Krafton (Yonhap)

A photo capture from the Facebook account of Krafton (Yonhap)

SEOUL, Oct. 7 (Korea Bizwire)South Korean online gaming company Krafton Inc.’s planned initial public offering (IPO) is drawing keen interest from potential investors following a recent series of highly successful share sales, industry sources said Wednesday.

The market craze follows megahit IPOs by Big Hit Entertainment, the management agency of K-pop phenoms BTS; mobile game giant Kakao Games; and biopharmaceutical blue chip SK Biopharmaceuticals.

Krafton, famous for the shooter game “PlayerUnknown’s Battlegrounds,” has recently started its IPO process by inviting bids for lead managers from local securities companies.

Details about Krafton’s IPO have yet to be unveiled, but market focus is already on whether its share sale will attract more investor money than the three predecessors.

Big Hit Entertainment lured 58.4 trillion won (US$50.1 billion) in subscription deposits from retail investors, while investor deposits for Kakao Games stood at 58.5 trillion won.

SK Biopharmaceuticals and Kakao Games debuted on the local bourse in July and September, respectively, closing at more than double their IPO prices on the first day of trading.

Market analysts say Krafton is superior to Kakao Games in terms of profits and ability to develop games.

Krafton registered an operating profit of 513.7 billion won on sales of 887.2 billion won in the first half of the year, much better than Kakao Games’ 28.7 billion operating profit on sales of 202.9 billion won.

Krafton posted the second-largest operating income for the January-June period after Nexon’s 773 billion won.

Chinese IT giant Tencent is Krafton’s second-largest shareholder with a 13.2 percent stake.

According to industry sources, several other companies, including South Korea’s top internet-only lender Kakao Bank, are looking to go public down the road.

In late September, Kakao Bank, a subsidiary of local internet portal behemoth Kakao, decided to take itself public and pick lead managers within the year.

South Korea’s No. 1 mobile payment service provider Kakao Pay, another Kakao unit, has already chosen local brokerage KB Securities as the lead manager for its IPO.

In July, South Korean vaccine maker SK Bioscience Co. tapped NH Investment Securities Co. as the lead manager and Korea Investment Co. as the co-lead manager to sell its shares on the Seoul bourse.

In addition, South Korea’s leading chemical company LG Chem Ltd. is pushing for an IPO of its planned spin-off battery business unit — tentatively named LG Energy Solutions — next year.


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