Internet firm threats dominance of Korean conglomerates
South Korea’s stock market has been ruled by a handful of traditional conglomerates, including Samsung, Hyundai, SK, and LG, over the past several decades.
But the country’s internet giant Kakao Group is threatening their dominance.
According to the Korea Stock Exchange on Aug. 19, the combined market capitalization of Kakao units topped 100 trillion won ($85 billion) this month to rank the fifth position in the country.
Samsung Group is the runaway leader with 728 trillion won, chased by SK Group with 206 trillion won. LG and Hyundai Motor groups followed with 151 trillion won and 142 trillion won, respectively.
The ranking of Kakao Group surged this month thanks to its affiliate Kakao Bank, which went public on Aug. 5.
On its initial public offering, the internet-only lender saw its market capitalization approached 40 trillion won, surpassing such traditional banking groups as KB and Shinhan.
It finished at higher than 42 trillion won on Aug. 19, closely chasing Hyundai Motor, the country’s largest automaker.
Kakao founder Kim Beom-su, who owns about 25 percent of Kakao, is already regarded as the richest person in the country, defeating Samsung Group chief Lee Jae-yong.
In addition, Kakao Group plans to float four more subsidiaries of Kakao Pay, Kakao Mobility, Kakao Entertainment, and Kakao Japan in the near future. Their combined values are estimated at some 40 trillion won.
Then, watchers expect that Kakao Group will compete with LG and Hyundai Motor to assume the third place in the Korean stock market.
“Kakao Group has more units to float, including Kakao Pay. And the cash secured through the IPO would further boost the group’s growth,” NH Investment & Securities analyst Ahn Jae-min said.
eBest Investment & Securities analyst Sung Jong-hwa concurred.
“The share prices of Kakao affiliates have shot up after the virus pandemic as the value of Kakao’s platform was highly appreciated,” he said.
Kakao is famous for its instant messenger service, which a vast majority of South Korean people use. Based on that, the group has proactively expanded its business horizon.