이 기사는 2021년 07월 02일 07:31 thebell 에 표출된 기사입니다.

South Korea’s internet-only bank KakaoBank has used an average price-to-book ratio (PBR) of 7.3 times to estimate its valuation for its planned initial public offering (IPO) while another internet-only lender K bank used a PBR of 2.5 times in its latest rights offering.

Market insiders said it is because the two lenders’ platform competitiveness differ significantly.

KakaoBank and its underwriters have selected four foreign platform companies and estimated the lender’s enterprise value at 22.96 trillion won ($20.27 billion), using their average PBR of 7.3 times. KakaoBank’s market capitalization is likely to be approximately 18.5 trillion won, a 18.8-31.3% discount to its valuation.

In contrast, K bank has been valued at 2.4 trillion won in its latest rights offering of 1.25 trillion won in May, using a PBR of 2.5 times. Its corporate value more than doubled in 10 months from 900 billion won in July 2020 to 2.4 trillion won. Based on an equity capital at the end of March, K bank’s PBR stands at approximately 2.463 times.

K bank has doubled its valuation by enhancing its sales capability, but it still has a long way to go to catch up with its galloping rival KakaoBank.

“Although they are in the same industry, it is difficult to apply KakaoBank's PBR of 7.3 times directly to K bank's enterprise value calculation because there is a clear difference in the number of monthly active users (MAU) and subscribers along with profits,” said an industry source. “It is the difference made by KakaoBank’s platform and Kakao Group’s ecosystem.”

KakaoBank has selected U.S.-based personal finance and consumer service company Rocket Companies, Brazilian financial technology solutions provider PagSeguro Digital, Russian online retail financial services provider TCS Group, and Swedish digital bank for savings and investments Nordnet as its peer companies. PagSeguro Digital has a PBR of 8.8 times, TCS Group eight times, Nordnet 7.6 times and Rocket Companies 4.6 times.

Many of these companies’ equity capital are less than KakaoBank and K bank’s. Nordnet has equity capital of 559 billion won, TCS Group 1.86 trillion won, and PagSeguro Digital 1.95 trillion won. Rocket Companies’ equity capital amounts to 8.58 trillion won. KakaoBank has equity capital of nearly 2.8 trillion won while K bank will have equity capital of approximately 1.73 trillion won after the rights offering.

KakaoBank’s peer companies generate high net profits despite their small equity capital. TSC Group has a return on equity (ROE) of 39.6%. Nordnet has a ROE of 32.3% and PagSeguro Digital has a ROE of 14.9%. KakaoBank’s ROE stands at 5.1% while K bank has a ROE of -10.34% as it is still in the red.

Although four companies included in the KakaoBank’s peer group have small net assets, they have one thing in common: they generate large profits based on their platforms.

PagSeguro Digital is known as Brazil's leading comprehensive financial platform that encompasses franchisees and consumers. TCS Group pursues the so-called full-life service platform. The company provides not only finance, but also travel services such as air tickets, hotels, train tickets, and rental cars, as well as leisure services such as movies, restaurants, and concerts thanks to its platform power. Nordnet is expanding its digital platform to Northern Europe beyond Sweden.

This is why KakaoBank and its underwriters have selected the four companies as peer companies. The lender said in its securities registration statement that it has selected foreign-listed digital financial service providers as peer companies in a bid to properly reflect KakaoBank's capabilities as a financial platform backed by its high MAU.

Market insiders said K bank has to secure its platform competitiveness to boost its corporate value. K bank has four million MAU while KakaoBank has 14 million MAU. Toss Bank, the mobile financial platform operated by Viva Republica, plans to convert as many users as possible to Toss Bank from Toss app, which has 11 million MAU. (Reporting by Hyun-jung Kim)