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.

Equity Capital Markets

<p>It has been reported that Kakao Pay is considering delaying its listing to September. This is because of the 135-day rule that a company undergoing an IPO must complete the listing procedure within 135 days from the date of preparation of the financial statements.</p><div class="content-highlight"><p><strong>According to this regulation, Kakao Pay must complete the listing within August 13, 135 days from the date of the 1Q21 financial statements.</strong></p></div><hr><h2>What is the 135-day rule?</h2><p><strong>The 135-day rule is a rule on the expiration date of accounting settlement data reflected in the IPO prospectus and the securities declarations for overseas investors.</strong></p><p>The important point here is that KRX does not have any rule similar to the 135 rule.</p><p>On the other hand, the US Securities and Exchange Commission stipulates that all listing schedules, including payment, be completed within 135 days from the time the financial statements stated in the IPO prospectus are prepared.</p><p><strong>So why should Kakao Pay care about the 135-day rule?</strong></p><div class="content-highlight"><p><strong>This rule does not apply to domestic investors, but it inevitably applies when a newly listed company with a large IPO size needs to raise funds abroad that are within the jurisdiction of the SEC.</strong></p></div><h2>When is the deadline for the initial IPO prospectus?</h2><p>If listing proceeds based on the financial statements at the end of the first quarter, March 31 will become the base date. So, the last business day of the 135-day rule will be <strong>August 13</strong>.</p><div class="content-highlight"><p><strong>For this reason, Kakao Pay's listing date was set for August 12, despite concerns about overlapping demand with Kakao Bank.</strong></p></div><p>That is, August 12, the scheduled listing date of Kakao Pay, was a really tight schedule. Therefore, the fact that the Financial Supervisory Service requested a revised report was risking that the listing schedule would be significantly pushed back.</p><h2>How long will the schedule be delayed?</h2><p>In the end, the 135-day rule was not met based on the 1Q financial statements, so the IPO prospectus has to be rewritten based on the 2nd quarter financial statements.</p><p><strong>This means that the IPO schedule has to be adjusted in line with the submission of the 2Q financial report to be published in mid-August.</strong></p><div class="content-highlight"><p><strong>In this case, considering that it will take at least a month or more to complete the listing process, including the FSS review period, it is expected that the company will be listed at the end of September at the earliest. In other words, at this point, the possibility of an October listing should remain open.</strong></p></div>

It has been reported that Kakao Pay is considering delaying its listing to September. This is because of the 135-day rule that a company undergoing an IPO must complete the listing procedure within 135 days from the date of preparation of the financial statements.According to this regulation, Kakao Pay must complete the listing within August 13, 135 days from the date of the 1Q21 financial statements.What is the 135-day rule?The 135-day rule is a rule on the expiration date of accounting settlement data reflected in the IPO prospectus and the securities declarations for overseas investors.The important point here is that KRX does not have any rule similar to the 135 rule.On the other hand, the US Securities and Exchange Commission stipulates that all listing schedules, including payment, be completed within 135 days from the time the financial statements stated in the IPO prospectus are prepared.So why should Kakao Pay care about the 135-day rule?This rule does not apply to domestic investors, but it inevitably applies when a newly listed company with a large IPO size needs to raise funds abroad that are within the jurisdiction of the SEC.When is the deadline for the initial IPO prospectus?If listing proceeds based on the financial statements at the end of the first quarter, March 31 will become the base date. So, the last business day of the 135-day rule will be August 13.For this reason, Kakao Pay's listing date was set for August 12, despite concerns about overlapping demand with Kakao Bank.That is, August 12, the scheduled listing date of Kakao Pay, was a really tight schedule. Therefore, the fact that the Financial Supervisory Service requested a revised report was risking that the listing schedule would be significantly pushed back.How long will the schedule be delayed?In the end, the 135-day rule was not met based on the 1Q financial statements, so the IPO prospectus has to be rewritten based on the 2nd quarter financial statements.This means that the IPO schedule has to be adjusted in line with the submission of the 2Q financial report to be published in mid-August.In this case, considering that it will take at least a month or more to complete the listing process, including the FSS review period, it is expected that the company will be listed at the end of September at the earliest. In other words, at this point, the possibility of an October listing should remain open.

Accurate Facts About the Application of Kakao Pay's 135-Day Listing Date Rule

<h2>Listing date</h2><p>The listing date of Krafton has been confirmed as August 10th.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Schedule"}'>Krafton IPO schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book open"}'>Book open</td>
<td data-sheets-value='{"1":3,"3":44391}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 7. 14</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book close"}'>Book close</td>
<td data-sheets-value='{"1":3,"3":44404}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 7. 27</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Allotment"}'>Allotment</td>
<td data-sheets-value='{"1":3,"3":44406}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 7. 29</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription"}'>Subscription</td>
<td data-sheets-value='{"1":3,"3":44410}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 8. 2</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td data-sheets-value='{"1":3,"3":44413}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 8. 5</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'><strong>Listing</strong></td>
<td data-sheets-value='{"1":3,"3":44418}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 8. 10</strong></td>
</tr>
<tr>
<td><em><strong> - Kakao Bank's listing</strong></em></td>
<td><em><strong>2021. 8. 5</strong></em></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><ul>
<li><strong>The initially scheduled date was August 10th. However, as Kakao Pay's listing date was set for August 12, Krafton could not easily finalize the listing date due to the issue of mutual interference for retail investors with Kakao Pay.</strong></li>
<li><strong>The fact that Krafton confirmed the listing date as soon as Kakao Pay's listing schedule was delayed shows how sensitive Krafton was to this retail interference issue.</strong></li>
</ul><div class="content-highlight">
<p>The listing date of Kakao Bank is August 5, and there is a gap of 3 business days until the listing date of Krafton. However, in this case, Krafton is in a position to absorb retail demand from Kakao Bank. More importantly, Kakao Bank must draw less attention from retail investors than Kakao Pay in terms of business nature, so there is no need to worry too much about potential interference with Kakao Bank.</p>
<p><strong>And then, at least until the end of August, there is no major listing. That is, there is enough temporal buffer for Krafton to drive retail demand.</strong></p>
</div>

Listing dateThe listing date of Krafton has been confirmed as August 10th.





Krafton IPO schedule

Book open
2021. 7. 14


Book close
2021. 7. 27


Allotment
2021. 7. 29


Subscription
2021. 8. 2


Payment
2021. 8. 5


Listing
2021. 8. 10


 - Kakao Bank's listing
2021. 8. 5

Source: DART


The initially scheduled date was August 10th. However, as Kakao Pay's listing date was set for August 12, Krafton could not easily finalize the listing date due to the issue of mutual interference for retail investors with Kakao Pay.
The fact that Krafton confirmed the listing date as soon as Kakao Pay's listing schedule was delayed shows how sensitive Krafton was to this retail interference issue.

The listing date of Kakao Bank is August 5, and there is a gap of 3 business days until the listing date of Krafton. However, in this case, Krafton is in a position to absorb retail demand from Kakao Bank. More importantly, Kakao Bank must draw less attention from retail investors than Kakao Pay in terms of business nature, so there is no need to worry too much about potential interference with Kakao Bank.
And then, at least until the end of August, there is no major listing. That is, there is enough temporal buffer for Krafton to drive retail demand.


Krafton Listing Date Confirmed as August 10th: Rebalancing Trading Timeline

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight">
<p><strong>It was announced today that the <a href="https://www.sedaily.com/NewsView/22OZJ2OWW6" target="_blank" rel="noopener">Kakao Pay IPO</a> will get postponed to 4Q 2021. Kakao Pay will submit revised IPO prospectus filings towards end of September/early October 2021.</strong></p>
<p><strong>As a result of this delay in IPO for Kakao Pay, we believe that this could actually lead to a greater demand for the Kakao Bank IPO. </strong></p>
</div>


It was announced today that the Kakao Pay IPO will get postponed to 4Q 2021. Kakao Pay will submit revised IPO prospectus filings towards end of September/early October 2021.
As a result of this delay in IPO for Kakao Pay, we believe that this could actually lead to a greater demand for the Kakao Bank IPO. 


A Delay in Kakao Pay IPO Should Help Kakao Bank IPO Demand

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.

<p><a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a> plans to raise around US$2.2bn via a mix of selling primary and secondary shares in its India IPO. The company is backed by <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> (<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>), <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and counts <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-a" target="_blank" data-smartkarma-citation="entities:1044:1" rel="noopener">Berkshire Hathaway Inc Cl A (BRK/A US)</a> among its investors.</p><p>Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.</p><p>The company clocked payment gross merchant value (GMV) of INR4tn (US$50bn) in FY21 for 114m transacting users during the year. Its users undertook a total of 7.4bn transactions in 2020. Along with its payment infrastructure, PayTM also runs a payment bank, in which it owns a 49% stake. The payment bank had a deposit base of INR52bn across 64m payment bank accounts.</p><p>In this note we will talk about the positive aspects of the deal.</p>

Paytm (PAYTM IN) plans to raise around US$2.2bn via a mix of selling primary and secondary shares in its India IPO. The company is backed by Ant Financial Services Group (6688 HK) (Alibaba Group (BABA US)), Softbank Group (9984 JP) and counts Berkshire Hathaway Inc Cl A (BRK/A US) among its investors.Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.The company clocked payment gross merchant value (GMV) of INR4tn (US$50bn) in FY21 for 114m transacting users during the year. Its users undertook a total of 7.4bn transactions in 2020. Along with its payment infrastructure, PayTM also runs a payment bank, in which it owns a 49% stake. The payment bank had a deposit base of INR52bn across 64m payment bank accounts.In this note we will talk about the positive aspects of the deal.

Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs

Event-Driven

<p>Over the past month, the stock performance of the four largest banks in Korea has been interesting. Hana Financial Group and Woori Financial Group outperformed relatively, and in particular, KB Financial Group underperformed by more than 5%p compared to Woori Financial Group.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/219/154/original/Screen+Shot+2021-07-18+at+6.21.51+PM.png?1626646949" class="editor-image img-responsive" data-smartkarma-image-id="219154"></figure><p></p></section><p>In this interim dividend, there is a possibility that dividends not paid last year will be paid retroactively. However, excluding this possibility and assuming that the total annual dividend for this year is adjusted to the level of 2019, Woori Financial Group and Hana Financial Group have the highest dividend yields.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 380.724px;" data-sheets-value='{"1":2,"2":"Dividend yield"}'>Estimated dividend yield, assuming that the total annual dividend for. this year is adjusted to the level of 2019</td>
<td style="text-align: right; width: 86.8324px;" data-sheets-value='{"1":3,"3":2018}'>2018</td>
<td style="text-align: right; width: 92.5852px;" data-sheets-value='{"1":3,"3":2019}'>2019</td>
<td style="text-align: right; width: 94.7301px;" data-sheets-value='{"1":3,"3":2020}'>2020</td>
<td style="text-align: right; width: 91.1364px;" data-sheets-value='{"1":2,"2":"2021E"}'>2021E</td>
</tr>
<tr>
<td style="width: 380.724px;" data-sheets-value='{"1":2,"2":"Shinhan Financial"}'>Shinhan Financial</td>
<td style="text-align: right; width: 86.8324px;" data-sheets-value='{"1":3,"3":0.0404}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.04%</td>
<td style="text-align: right; width: 92.5852px;" data-sheets-value='{"1":3,"3":0.0427}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.27%</td>
<td style="text-align: right; width: 94.7301px;" data-sheets-value='{"1":3,"3":0.0468}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.68%</td>
<td style="text-align: right; width: 91.1364px;" data-sheets-value='{"1":3,"3":0.050608571468662246}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-14]C[0]/googlefinance(R[-42]C[0], "price")'><strong>5.06%</strong></td>
</tr>
<tr>
<td style="width: 380.724px;" data-sheets-value='{"1":2,"2":"KB Financial"}'>KB Financial</td>
<td style="text-align: right; width: 86.8324px;" data-sheets-value='{"1":3,"3":0.0413}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.13%</td>
<td style="text-align: right; width: 92.5852px;" data-sheets-value='{"1":3,"3":0.0464}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.64%</td>
<td style="text-align: right; width: 94.7301px;" data-sheets-value='{"1":3,"3":0.0408}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.08%</td>
<td style="text-align: right; width: 91.1364px;" data-sheets-value='{"1":3,"3":0.05260170044159115}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-14]C[0]/googlefinance(R[-42]C[0], "price")'><strong>5.26%</strong></td>
</tr>
<tr>
<td style="width: 380.724px;" data-sheets-value='{"1":2,"2":"Hana Financial"}'>Hana Financial</td>
<td style="text-align: right; width: 86.8324px;" data-sheets-value='{"1":3,"3":0.0524}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.24%</td>
<td style="text-align: right; width: 92.5852px;" data-sheets-value='{"1":3,"3":0.0569}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.69%</td>
<td style="text-align: right; width: 94.7301px;" data-sheets-value='{"1":3,"3":0.0536}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.36%</td>
<td style="text-align: right; width: 91.1364px;" data-sheets-value='{"1":3,"3":0.0619847401646764}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-14]C[0]/googlefinance(R[-42]C[0], "price")'><strong>6.20%</strong></td>
</tr>
<tr>
<td style="width: 380.724px;" data-sheets-value='{"1":2,"2":"Woori Financial"}'><div><div>Woori Financial</div></div></td>
<td style="text-align: right; width: 86.8324px;"></td>
<td style="text-align: right; width: 92.5852px;" data-sheets-value='{"1":3,"3":0.0603}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>6.03%</td>
<td style="text-align: right; width: 94.7301px;" data-sheets-value='{"1":3,"3":0.037}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>3.70%</td>
<td style="text-align: right; width: 91.1364px;" data-sheets-value='{"1":3,"3":0.06629340778032639}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-14]C[0]/googlefinance(R[-42]C[0], "price")'><strong>6.63%</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Source: FnGuide &amp; KSD Seibro"}'>Source: FnGuide &amp; KSD Seibro</td></tr>
</tbody>
</table><p>This is similar to the dividend yield calculated based on this year's estimated DPS of local street consensus gathered by FnGuide.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 362.429px;" data-sheets-value='{"1":2,"2":"Dividend yield"}'>Annual dividend yield based on the local street consensus compiled by FnGuide</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":2018}'>2018</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":2019}'>2019</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":2020}'>2020</td>
<td style="text-align: right; width: 96.0653px;" data-sheets-value='{"1":2,"2":"2021E"}'>2021E</td>
</tr>
<tr>
<td style="width: 362.429px;" data-sheets-value='{"1":2,"2":"Shinhan Financial"}'>Shinhan Financial</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0404}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.04%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0427}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.27%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0468}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.68%</td>
<td style="text-align: right; width: 96.0653px;" data-sheets-value='{"1":3,"3":0.052}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-28]C[0]/googlefinance(R[-35]C[0], "price")'><strong>5.20%</strong></td>
</tr>
<tr>
<td style="width: 362.429px;" data-sheets-value='{"1":2,"2":"KB Financial"}'>KB Financial</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0413}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.13%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0464}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.64%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0408}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.08%</td>
<td style="text-align: right; width: 96.0653px;" data-sheets-value='{"1":3,"3":0.05146666666666667}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-28]C[0]/googlefinance(R[-35]C[0], "price")'><strong>5.15%</strong></td>
</tr>
<tr>
<td style="width: 362.429px;" data-sheets-value='{"1":2,"2":"Hana Financial"}'>Hana Financial</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0524}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.24%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0569}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.69%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0536}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.36%</td>
<td style="text-align: right; width: 96.0653px;" data-sheets-value='{"1":3,"3":0.06045662100456621}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-28]C[0]/googlefinance(R[-35]C[0], "price")'><strong>6.05%</strong></td>
</tr>
<tr>
<td style="width: 362.429px;" data-sheets-value='{"1":2,"2":"Woori Financial"}'><div><div>Woori Financial</div></div></td>
<td style="text-align: right; width: 95.8381px;">-</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0603}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>6.03%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.037}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>3.70%</td>
<td style="text-align: right; width: 96.0653px;" data-sheets-value='{"1":3,"3":0.06334801762114538}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-28]C[0]/googlefinance(R[-35]C[0], "price")'><strong>6.33%</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Source: FnGuide &amp; KSD Seibro"}'>Source: FnGuide &amp; KSD Seibro</td></tr>
</tbody>
</table><p>As shown in the downward trend of 12M forward PER below, the market is taking a conservative approach to the recent slowdown in bank stocks' earnings growth, which is believed to have led to growing interest in dividends.</p><p>Interestingly, the difference in P/E decline between Hana Financial Group and KB Financial Group was the largest. This seems to have been influenced by the fact that Hana Financial Group has a higher probability of paying expected dividends than Woori Financial Group.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"12-month forward PER"}'>12-month forward PER</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44393}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 7. 16</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"3 months ago"}'>3 months ago</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"3-month Δ"}'>3-month Δ</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shinhan Financial"}'>Shinhan Financial</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.03}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>5.03x</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.12}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>5.12x</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.017578124999999972}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R[0]C[-1])/R[0]C[-1]">-1.76%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"KB Financial"}'><strong>KB Financial</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.17}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'><strong>5.17x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.65}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'><strong>5.65x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.08495575221238945}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R[0]C[-1])/R[0]C[-1]"><strong>-8.50%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hana Financial"}'><strong>Hana Financial</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4.21}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'><strong>4.21x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4.35}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'><strong>4.35x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.03218390804597694}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R[0]C[-1])/R[0]C[-1]"><strong>-3.22%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Woori Financial"}'>Woori Financial</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3.99}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>3.99x</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4.16}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>4.16x</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.040865384615384595}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R[0]C[-1])/R[0]C[-1]">-4.09%</td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: FnGuide &amp; KSD Seibro"}'>Source: FnGuide &amp; KSD Seibro</td></tr>
</tbody>
</table>

Over the past month, the stock performance of the four largest banks in Korea has been interesting. Hana Financial Group and Woori Financial Group outperformed relatively, and in particular, KB Financial Group underperformed by more than 5%p compared to Woori Financial Group.In this interim dividend, there is a possibility that dividends not paid last year will be paid retroactively. However, excluding this possibility and assuming that the total annual dividend for this year is adjusted to the level of 2019, Woori Financial Group and Hana Financial Group have the highest dividend yields.









Estimated dividend yield, assuming that the total annual dividend for. this year is adjusted to the level of 2019
2018
2019
2020
2021E


Shinhan Financial
4.04%
4.27%
4.68%
5.06%


KB Financial
4.13%
4.64%
4.08%
5.26%


Hana Financial
5.24%
5.69%
5.36%
6.20%


Woori Financial

6.03%
3.70%
6.63%

Source: FnGuide &amp; KSD Seibro

This is similar to the dividend yield calculated based on this year's estimated DPS of local street consensus gathered by FnGuide.









Annual dividend yield based on the local street consensus compiled by FnGuide
2018
2019
2020
2021E


Shinhan Financial
4.04%
4.27%
4.68%
5.20%


KB Financial
4.13%
4.64%
4.08%
5.15%


Hana Financial
5.24%
5.69%
5.36%
6.05%


Woori Financial
-
6.03%
3.70%
6.33%

Source: FnGuide &amp; KSD Seibro

As shown in the downward trend of 12M forward PER below, the market is taking a conservative approach to the recent slowdown in bank stocks' earnings growth, which is believed to have led to growing interest in dividends.Interestingly, the difference in P/E decline between Hana Financial Group and KB Financial Group was the largest. This seems to have been influenced by the fact that Hana Financial Group has a higher probability of paying expected dividends than Woori Financial Group.








12-month forward PER
2021. 7. 16
3 months ago
3-month Δ


Shinhan Financial
5.03x
5.12x
-1.76%


KB Financial
5.17x
5.65x
-8.50%


Hana Financial
4.21x
4.35x
-3.22%


Woori Financial
3.99x
4.16x
-4.09%

Source: FnGuide &amp; KSD Seibro



Korean Local Banks Trading Dynamics: Dividend Yield Difference & Kakao Bank Listing

South Korea

KakaoBank Corp. operates bank businesses. The Company provides deposit money, withdraw money, credit cards, stock accounts, linked loans, and other services. KakaoBank conducts businesses in South Korea.

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KakaoBank (323410 KS)

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