Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<p>It is now clear that Netmarble sold part of its stake in Kakao Bank yesterday in the market to finance the acquisition of SpinX, a social casino company.</p><p>In other words, Netmarble sold its Kakao Bank stake because it needed immediate cash. <span>Earlier this month, Netmarble announced that it would purchase a 100% stake in Leonardo Interactive Holdings Limited, the parent company of SpinX.</span></p><div class="content-highlight"><p><strong>The 100% stake acquisition price is ₩2.513T.</strong></p></div><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/219/original/Screen+Shot+2021-08-11+at+1.48.24+AM.png?1628661029" class="editor-image img-responsive" data-smartkarma-image-id="223219"></figure></section><p>Netmarble said in a regulatory filing that it would pay 80% of the acquisition price at the time of contract termination and the remaining 20% ​​over the next four years.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/225/original/Screen+Shot+2021-08-11+at+1.51.07+AM.png?1628661602" class="editor-image img-responsive" data-smartkarma-image-id="223225"></figure></section><p><strong>It means that the total money Netmarble needs right now is ₩2.104T, which is 80% of the acquisition amount. Netmarble revealed that ₩1.779T of this ₩2.104T was covered by short-term borrowing. In other words, the immediate cash needed right now is ₩232B.</strong></p><p>However, Netmarble's cash assets at the end of this first quarter stood at ₩260B. Even ₩232B is a size that needs to use up all of its cash holdings, so it places a significant financial burden on Netmarble.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/228/original/Screen+Shot+2021-08-11+at+2.05.56+AM.png?1628662449" class="editor-image img-responsive" data-smartkarma-image-id="223228"></figure></section>

It is now clear that Netmarble sold part of its stake in Kakao Bank yesterday in the market to finance the acquisition of SpinX, a social casino company.In other words, Netmarble sold its Kakao Bank stake because it needed immediate cash. Earlier this month, Netmarble announced that it would purchase a 100% stake in Leonardo Interactive Holdings Limited, the parent company of SpinX.The 100% stake acquisition price is ₩2.513T.Netmarble said in a regulatory filing that it would pay 80% of the acquisition price at the time of contract termination and the remaining 20% ​​over the next four years.It means that the total money Netmarble needs right now is ₩2.104T, which is 80% of the acquisition amount. Netmarble revealed that ₩1.779T of this ₩2.104T was covered by short-term borrowing. In other words, the immediate cash needed right now is ₩232B.However, Netmarble's cash assets at the end of this first quarter stood at ₩260B. Even ₩232B is a size that needs to use up all of its cash holdings, so it places a significant financial burden on Netmarble.

Three Local Stocks Exposed to Netmarble's Stake Sale Risk: NCsoft, HYBE, & Kakao Games

Equity Capital Markets

<h2><strong>Netmarble selling Kakao Bank</strong></h2><p>We got to know who was driving Kakao Bank's share price drop today.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/142/original/Screen+Shot+2021-08-10+at+12.47.04+PM.png?1628614043" class="editor-image img-responsive" data-smartkarma-image-id="223142"></figure><p></p></section><p>That is, Netmarble sold about 40% of its stake in Kakao Bank today. The following is Netmarble's regulatory filing published after the market closed.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/141/original/Screen+Shot+2021-08-10+at+12.45.18+PM.png?1628613964" class="editor-image img-responsive" data-smartkarma-image-id="223141"></figure></section><p>Netmarble sold 6 million Kakao Bank shares in the market during the regular trading hours for a total of ₩430.2B. So the sale price per share is ₩71,697.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Netmarble selloff"}'>Netmarble selling</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares sold"}'>Shares sold</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6000000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>6,000,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total amount"}'>Total amount</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":430.1838765}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩430.2B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Sellng price per share"}'><strong>- Sale price per share</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":71697.31275}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-1]C[0]*1000000000/R[-2]C[0]"><strong>₩71,697</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>On the third trading day of Kakao Bank, local retail again led the trading, and institutional investors did not show an active trading trend. So, it appears that Netmarble's 6 million shares mostly went to local retail investors.</p><p><strong>However, among institutional investors, local pensions traded fairly actively, and a meaningful portion of Netmarble's selling volume seems to have flowed to them. Perhaps this should be a preemptive action for the KOSPI 200 rebalancing trading.</strong></p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Trade by investor type"}'>Trade by investor type on August 10</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Sell"}'>Sell</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Buy"}'>Buy</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Net"}'>Net</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Brokerages &amp; investment advisories managing proprietary assets"}'>Brokerages &amp; investment advisories</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":38095}' data-sheets-numberformat='[null,2,"#,##0",1]'>38,095</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":42140}' data-sheets-numberformat='[null,2,"#,##0",1]'>42,140</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4045}' data-sheets-numberformat='[null,2,"#,##0",1]'>+4,045</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Insurance"}'>Insurance</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50742}' data-sheets-numberformat='[null,2,"#,##0",1]'>50,742</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":95564}' data-sheets-numberformat='[null,2,"#,##0",1]'>95,564</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44822}' data-sheets-numberformat='[null,2,"#,##0",1]'>+44,822</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Publicly raised funds"}'>Publicly raised funds</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50879}' data-sheets-numberformat='[null,2,"#,##0",1]'>50,879</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":90095}' data-sheets-numberformat='[null,2,"#,##0",1]'>90,095</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":39216}' data-sheets-numberformat='[null,2,"#,##0",1]'>+39,216</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Private equity"}'>Private equity</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":65862}' data-sheets-numberformat='[null,2,"#,##0",1]'>65,862</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":28528}' data-sheets-numberformat='[null,2,"#,##0",1]'>28,528</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-37334}' data-sheets-numberformat='[null,2,"#,##0",1]'>-37,334</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Banks"}'>Banks</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"#,##0",1]'>0</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"#,##0",1]'>0</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"#,##0",1]'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Other - financial (eg. savings banks)"}'>Other - financial (e.g., savings banks)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":100}' data-sheets-numberformat='[null,2,"#,##0",1]'>100</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1564}' data-sheets-numberformat='[null,2,"#,##0",1]'>1,564</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1464}' data-sheets-numberformat='[null,2,"#,##0",1]'>+1,464</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pension"}'><strong>Pension</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":73722}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>73,722</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":901630}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>901,630</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":827908}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>+827,908</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Other - corporations"}'><strong>Other - corporations (→ should be mostly Netmarble)</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6038836}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>6,038,836</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":66578}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>66,578</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-5972258}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>-5,972,258</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Local retail"}'><strong>Local retail</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":19536212}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>19,536,212</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":24483461}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>24,483,461</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4947249}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>+4,947,249</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Foreign"}'>Foreign</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":592781}' data-sheets-numberformat='[null,2,"#,##0",1]'>592,781</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":710588}' data-sheets-numberformat='[null,2,"#,##0",1]'>710,588</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":117807}' data-sheets-numberformat='[null,2,"#,##0",1]'>+117,807</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Other - foreign"}'>Other - foreign</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":47893}' data-sheets-numberformat='[null,2,"#,##0",1]'>47,893</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":74974}' data-sheets-numberformat='[null,2,"#,##0",1]'>74,974</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":27081}' data-sheets-numberformat='[null,2,"#,##0",1]'>+27,081</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total"}'>Total</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":26495122}' data-sheets-numberformat='[null,2,"#,##0",1]'>26,495,122</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":26495122}' data-sheets-numberformat='[null,2,"#,##0",1]'>26,495,122</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}'>0</td>
</tr>
<tr><td colspan="4" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p>As a result, Netmarble's stake decreased from 3.21% to 1.94%. Of these, 1.60% are locked up for 3 months. On the other hand, 0.34% can be sold additionally. Netmarble did not disclose plans for further selling of its holdings.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Shareholding"}'>Shareholding</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":2,"2":"Post-IPO"}'>Post-IPO</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":2,"2":"Shares"}'>Shares</td>
<td style="text-align: right; width: 177.514px;" data-sheets-value='{"1":2,"2":"After today"}'>After today</td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Kakao"}'>Kakao</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.2726450439552191}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">27.26%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":129533725}' data-sheets-numberformat='[null,2,"#,##0",1]'>129,533,725</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Korea Investment Financial Holdings"}'>Korea Investment Financial Holdings</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.27264504185040006}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">27.26%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":129533724}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=R[-25]C[0]+R[-24]C[0]">129,533,724</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,3,"0.00%",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"KB Kookmin Bank"}'>KB Kookmin Bank</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.08018930750396573}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">8.02%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":38097959}' data-sheets-numberformat='[null,2,"#,##0",1]'>38,097,959</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,3,"0.00%",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Netmarble (KS 251270)"}'><strong>Netmarble (KS 251270)</strong></td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.032075721738694905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3"><strong>3.21%</strong></td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":15239183}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>15,239,183</strong></td>
<td style="text-align: right; width: 177.514px;" data-sheets-value='{"1":3,"3":9239183}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=R[0]C[-1]-6000000"><strong>1.94% (9,239,183 shares)</strong></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Tencent"}'>Tencent</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.032075721738694905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">3.21%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":15239183}' data-sheets-numberformat='[null,2,"#,##0",1]'>15,239,183</td>
<td style="text-align: right; width: 177.514px;" data-sheets-value='{"1":3,"3":0.019446807811211428}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[-1]C[0]/R[10]C[-1]"></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Seoul Guarantee Insurance Company"}'>Seoul Guarantee Insurance Company</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.032075721738694905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">3.21%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":15239183}' data-sheets-numberformat='[null,2,"#,##0",1]'>15,239,183</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Korea Post"}'>Korea Post</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.032075721738694905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">3.21%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":15239183}' data-sheets-numberformat='[null,2,"#,##0",1]'>15,239,183</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"eBay Korea"}'>eBay Korea</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.032075721738694905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">3.21%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":15239183}' data-sheets-numberformat='[null,2,"#,##0",1]'>15,239,183</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Anchor Equity Partners"}'>Anchor Equity Partners</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.02239527403140403}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">2.24%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":10640000}' data-sheets-numberformat='[null,2,"#,##0",1]'>10,640,000</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"TPG Capital"}'>TPG Capital</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.02239527403140403}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">2.24%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":10640000}' data-sheets-numberformat='[null,2,"#,##0",1]'>10,640,000</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Yes24 (KS 053280)"}'>Yes24 (KS 053280)</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.011958303864201188}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">1.20%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":5681393}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=R[-16]C[1]">5,681,393</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"ESOP (post-IPO shareholders)"}'>ESOP</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.027552080551793114}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">2.76%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":13090000}' data-sheets-numberformat='[null,2,"#,##0",1]'>13,090,000</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Pre-IPO non-lockup minority shareholders having less than a 1% stake"}'>Other pre-IPO non-lockup minority shareholders</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.019632743310965765}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">1.96%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":9327521}' data-sheets-numberformat='[null,2,"#,##0",1]'>9,327,521</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"IPO shareholders (institutional &amp; retail)"}'>IPO shareholders (institutional &amp; retail)</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.11020832220717246}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/R14C3">11.02%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":52360000}' data-sheets-numberformat='[null,2,"#,##0",1]'>52,360,000</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr>
<td style="width: 334.886px;" data-sheets-value='{"1":2,"2":"Total"}'>Total</td>
<td style="text-align: right; width: 112.287px;" data-sheets-value='{"1":3,"3":0.9999999999999999}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=sum(R[-14]C[0]:R[-1]C[0])">100.00%</td>
<td style="text-align: right; width: 121.321px;" data-sheets-value='{"1":3,"3":475100237}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=sum(R[-14]C[0]:R[-1]C[0])">475,100,237</td>
<td style="text-align: right; width: 177.514px;" data-sheets-numberformat='[null,2,"#,##0",1]'></td>
</tr>
<tr><td colspan="4" rowspan="1" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Netmarble selling Kakao BankWe got to know who was driving Kakao Bank's share price drop today.That is, Netmarble sold about 40% of its stake in Kakao Bank today. The following is Netmarble's regulatory filing published after the market closed.Netmarble sold 6 million Kakao Bank shares in the market during the regular trading hours for a total of ₩430.2B. So the sale price per share is ₩71,697.





Netmarble selling

Shares sold
6,000,000


Total amount
₩430.2B


- Sale price per share
₩71,697

Source: DART

On the third trading day of Kakao Bank, local retail again led the trading, and institutional investors did not show an active trading trend. So, it appears that Netmarble's 6 million shares mostly went to local retail investors.However, among institutional investors, local pensions traded fairly actively, and a meaningful portion of Netmarble's selling volume seems to have flowed to them. Perhaps this should be a preemptive action for the KOSPI 200 rebalancing trading.








Trade by investor type on August 10
Sell
Buy
Net


Brokerages &amp; investment advisories
38,095
42,140
+4,045


Insurance
50,742
95,564
+44,822


Publicly raised funds
50,879
90,095
+39,216


Private equity
65,862
28,528
-37,334


Banks
0
0
0


Other - financial (e.g., savings banks)
100
1,564
+1,464


Pension
73,722
901,630
+827,908


Other - corporations (→ should be mostly Netmarble)
6,038,836
66,578
-5,972,258


Local retail
19,536,212
24,483,461
+4,947,249


Foreign
592,781
710,588
+117,807


Other - foreign
47,893
74,974
+27,081


Total
26,495,122
26,495,122
0

Source: KRX

As a result, Netmarble's stake decreased from 3.21% to 1.94%. Of these, 1.60% are locked up for 3 months. On the other hand, 0.34% can be sold additionally. Netmarble did not disclose plans for further selling of its holdings.








Shareholding
Post-IPO
Shares
After today


Kakao
27.26%
129,533,725



Korea Investment Financial Holdings
27.26%
129,533,724



KB Kookmin Bank
8.02%
38,097,959



Netmarble (KS 251270)
3.21%
15,239,183
1.94% (9,239,183 shares)


Tencent
3.21%
15,239,183



Seoul Guarantee Insurance Company
3.21%
15,239,183



Korea Post
3.21%
15,239,183



eBay Korea
3.21%
15,239,183



Anchor Equity Partners
2.24%
10,640,000



TPG Capital
2.24%
10,640,000



Yes24 (KS 053280)
1.20%
5,681,393



ESOP
2.76%
13,090,000



Other pre-IPO non-lockup minority shareholders
1.96%
9,327,521



IPO shareholders (institutional &amp; retail)
11.02%
52,360,000



Total
100.00%
475,100,237


Source: DART



Netmarble Selling Kakao Bank: Additional Sellings & What Should We Do?

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight">
<p>On 10 August, it was reported that <a href="https://www.smartkarma.com/entities/netmarble-corporation" target="_blank" data-smartkarma-citation="entities:22839:1" rel="noopener">Netmarble Corporation (251270 KS)</a> sold 6 million shares of <a href="https://www.smartkarma.com/entities/kakaobank-corp" target="_blank" data-smartkarma-citation="entities:33501:1" rel="noopener">KakaoBank (323410 KS)</a> for 430 billion won. The average selling price was 71,697 won (vs. current price of 71,400 won). Post this deal, Netmarble's stake in Kakao Bank was reduced to 1.94%.</p>
<p>Netmarble mentioned that it sold its shares of Kakao Bank to improve its liquidity and cash balance. The sale of Kakao Bank's shares by Netmarble helped to push down the share price of Kakao Bank by 9%. </p>
<p>We believe that this sale of Kakao Bank by Netmarble is likely to have a further negative impact on Kakao Bank shares. More investors will be concerned about the overall valuations of the company as a major original investor in Kakao Bank have sold their shares in just the third day of trading post IPO. </p>
</div>


On 10 August, it was reported that Netmarble Corporation (251270 KS) sold 6 million shares of KakaoBank (323410 KS) for 430 billion won. The average selling price was 71,697 won (vs. current price of 71,400 won). Post this deal, Netmarble's stake in Kakao Bank was reduced to 1.94%.
Netmarble mentioned that it sold its shares of Kakao Bank to improve its liquidity and cash balance. The sale of Kakao Bank's shares by Netmarble helped to push down the share price of Kakao Bank by 9%. 
We believe that this sale of Kakao Bank by Netmarble is likely to have a further negative impact on Kakao Bank shares. More investors will be concerned about the overall valuations of the company as a major original investor in Kakao Bank have sold their shares in just the third day of trading post IPO. 


Netmarble Sells 6 Million Shares of Kakao Bank for 430 Billion Won

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<div><p>Kakao Bank (KB), South Korea’s largest digital bank, raised US$2.2bn in its South Korean IPO. It ended the first day of trading up 79% from its IPO price. </p></div><div>We have covered various aspects of the deal in our previous notes:</div><div><ul>
<li>
<a href="https://www.smartkarma.com/insights/kakao-bank-ipo-riding-on-parent-s-network-but-boundaries-with-kakao-pay-remain-unclear" target="_blank" rel="noopener">Kakao Bank IPO - Riding on parents network but boundaries with Kakao Pay remain unclear</a>, </li>
<li><a href="https://www.smartkarma.com/insights/kakao-bank-ipo-pricey-as-it-should-be" target="_blank" rel="noopener">Kakao Bank IPO - Pricey as It Should Be</a></li>
<li><a href="https://www.smartkarma.com/insights/kakao-bank-ipo-lack-of-lock-up-and-msci-ftse-index-implications" target="_blank" rel="noopener">Kakao Bank IPO - Lack of Lock-Up and MSCI, FTSE Index Implications, and</a></li>
<li><a href="https://www.smartkarma.com/insights/kakao-bank-ipo-trading-one-for-instis-closer-look-at-ftse-and-msci-inclusion-remain-buyers" target="_blank" rel="noopener">Kakao Bank IPO Trading - One for Instis, Closer Look at FTSE and MSCI Inclusion. Remain Buyers</a></li>
</ul></div><div><p>In this note, we will talk about the first day trading and index inclusion.</p></div>

Kakao Bank (KB), South Korea’s largest digital bank, raised US$2.2bn in its South Korean IPO. It ended the first day of trading up 79% from its IPO price. We have covered various aspects of the deal in our previous notes:

Kakao Bank IPO - Riding on parents network but boundaries with Kakao Pay remain unclear, 
Kakao Bank IPO - Pricey as It Should Be
Kakao Bank IPO - Lack of Lock-Up and MSCI, FTSE Index Implications, and
Kakao Bank IPO Trading - One for Instis, Closer Look at FTSE and MSCI Inclusion. Remain Buyers
In this note, we will talk about the first day trading and index inclusion.

Kakao Bank - MSCI Done, Missed FTSE by a Whisker.

<div><p>Kakao Bank (KB), South Korea’s largest digital bank, raised up to US$2.2bn in its South Korean IPO. Kakao will hold a 27.26% stake post listing. The share will begin to trade on 6th Aug 2021.</p></div><div><p>Even though Kakao started operations only in July 2017, by 2020 it had already garnered more than 1% market share of overall loans and deposits in South Korea. KB’s loans have grown by 138% over 2018 to 1Q21 to reach KRW21.6tn, while its deposits have grown by 197% over the same period to reach KRW24.2tn. </p></div><div><p>Over 2018-20, its total income (Net interest income plus net fee income) grew by 216%, while it went from booking a loss in 2018 to reporting a 26% profit margin by 2020. KB’s total income was up another 60% YoY in 1Q21, while PAT was up 153% YoY.</p></div><div><p>We have covered various aspects of the deal in our previous notes, <a href="https://www.smartkarma.com/insights/kakao-bank-ipo-riding-on-parent-s-network-but-boundaries-with-kakao-pay-remain-unclear" target="_blank" rel="noopener">Kakao Bank IPO - Riding on parents network but boundaries with Kakao Pay remain unclear</a>, <a href="https://www.smartkarma.com/insights/kakao-bank-ipo-pricey-as-it-should-be" target="_blank" rel="noopener">Kakao Bank IPO - Pricey as It Should Be </a>and <a href="https://www.smartkarma.com/insights/kakao-bank-ipo-lack-of-lock-up-and-msci-ftse-index-implications" target="_blank" rel="noopener">Kakao Bank IPO - Lack of Lock-Up and MSCI, FTSE Index Implications</a>.</p></div><div><p>In this note, we will talk about the deal's trading dynamics.</p></div>

Kakao Bank (KB), South Korea’s largest digital bank, raised up to US$2.2bn in its South Korean IPO. Kakao will hold a 27.26% stake post listing. The share will begin to trade on 6th Aug 2021.Even though Kakao started operations only in July 2017, by 2020 it had already garnered more than 1% market share of overall loans and deposits in South Korea. KB’s loans have grown by 138% over 2018 to 1Q21 to reach KRW21.6tn, while its deposits have grown by 197% over the same period to reach KRW24.2tn. Over 2018-20, its total income (Net interest income plus net fee income) grew by 216%, while it went from booking a loss in 2018 to reporting a 26% profit margin by 2020. KB’s total income was up another 60% YoY in 1Q21, while PAT was up 153% YoY.We have covered various aspects of the deal in our previous notes, Kakao Bank IPO - Riding on parents network but boundaries with Kakao Pay remain unclear, Kakao Bank IPO - Pricey as It Should Be and Kakao Bank IPO - Lack of Lock-Up and MSCI, FTSE Index Implications.In this note, we will talk about the deal's trading dynamics.

Kakao Bank IPO Trading - One for Instis, Closer Look at FTSE and MSCI Inclusion. Remain Buyers

South Korea

Netmarble Corporation develops and publishes mobile games. The Company develops and publishes casual games, action, sports games, strategy, simulation games, and social casino games. Netmarble offers services worldwide.

Price Gauge
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Netmarble (251270 KS)

Three Local Stocks Exposed to Netmarble's Stake Sale Risk: NCsoft, HYBE, & Kakao Games

Netmarble will continue to need short-term cash. Perhaps, for this reason, the stock prices of all three stocks exposed to this risk have undergone...

Sanghyun Park

Netmarble Selling Kakao Bank: Additional Sellings & What Should We Do?

We need to raise the short-term float for Kakao Bank, which can become as high as 13.25% until the KOSPI 200 rebalancing implementation date,...

Sanghyun Park

Netmarble Sells 6 Million Shares of Kakao Bank for 430 Billion Won

On 10 August, it was reported that Netmarble Corporation (251270 KS) sold 6 million shares of KakaoBank (323410 KS) for 430 billion won.

Douglas Kim

Kakao Bank - MSCI Done, Missed FTSE by a Whisker.

Kakao Bank (KB), South Korea’s largest digital bank, raised US$2.2bn in its South Korean IPO. It ended the first day of trading up 79% from its IPO...

Sumeet Singh

Kakao Bank IPO Trading - One for Instis, Closer Look at FTSE and MSCI Inclusion. Remain Buyers

Kakao Bank, South Korea’s largest digital bank, raised up to US$2.2bn in its South Korean IPO. Kakao will hold a 27.26% stake post listing. The...

Sumeet Singh

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52-week Range

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