By Joyce Lee
SEOUL (Reuters) -Krafton Inc, the South Korean company behind the hit video game “PlayerUnknown’s Battlegrounds,” said on Wednesday its IPO would raise as much as 5.6 trillion won ($ 5 billion) at the top of an indicative range, which it would be a record for the country.
Krafton, backed by Tencent, said in a regulatory filing that it expected to offer 10 million shares, or 7 million new shares and 3 million existing shares, in an indicative range of 458,000 to 557,000 won per share.
At the top of the range, this would be South Korea’s largest listing, beating Samsung’s (KS 🙂 Life Insurance’s 4.9 trillion won IPO in 2010.
The price is expected to be decided in the coming weeks, and is expected to trade in July.
Krafton’s online multiplayer war fighting game PUBG has sold 25 million copies on PC and game consoles, becoming one of the best-selling games since its launch in 2017.
Chinese gaming and social media giant Tencent is currently Krafton’s second-largest shareholder with a 15.35% stake through an investment vehicle, according to a regulatory document.
Krafton plans to release two new games this year based on PUBG’s intellectual property (IP), including the mobile game “PUBG: New State” and “Battlegrounds Mobile India” targeting the Indian market.
The company is also expanding into areas such as web-based cartoons, movies and animations, and is developing a deep learning artificial intelligence business model aimed at consumers.
It reported 1.67 trillion won in revenue in 2020, and its operating profit doubled from the previous year to 774 billion won.
The company estimated its valuation at 35 trillion won, with a price-earnings ratio of 45.2, which is slightly lower than the South Korean gaming industry, NCSoft and Netmarble peers, according to its filing.
Mirae Asset Securities is the principal advisor to the IPO, while Credit Suisse (SIX :), NH Investment & Securities, Citigroup (NYSE 🙂 and JP Morgan are also advisers.
South Korea is experiencing its hottest IPO market on record and analysts expect at least 20 trillion won to be raised in 2021, or roughly four times above 2020 levels.
“This year is unprecedented in the concentration of huge new listings in the market with market capitalizations ranging from trillion won to tens of trillion won,” said Choi Jong-kyung, an analyst at Heungkuk Securities.
($ 1 = 1,117.1400 won)
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