Piccoma pushes back Tokyo IPO to next year

SEOUL: South Korean messaging giant Kakao Corp’s manga business is pushing back plans to go public on the Tokyo Stock Exchange until next year, aiming for a valuation of US$6bil (RM27bil) or more.

Manga app operator Kakao Piccoma Corp had previously planned an initial public offering (IPO) for this December but is delaying the process amid slumping tech valuations, according to people familiar with the matter.

Piccoma was valued at about 847 billion yen (RM27bil) when it raised funds last year and the company hopes to maintain that threshold when it goes public, one of the people said.

Its IPO will likely take place during the first half but plans remain flexible and hinge on market prices, the people said.

Piccoma joins a growing pipeline of companies waiting to go public after a global stock market rout hammered tech firms with lofty multiples.

Valuations for eCommerce giant Coupang Inc – sometimes called the Amazon of South Korea – briefly soared to more than US$86bil (RM386bil) last year following a US$4.6bil (RM21bil) New York listing, only to plunge more than 60% from that peak.

That has become a cautionary tale for firms ranging from SoftBank Group Corp’s chip architect Arm Ltd to Kakao Entertainment Corp, which are both considering New York listings but have yet to decide on a timeline.

Piccoma, whose site features popular Japanese-style comics, can be patient because it is already turning a profit, according to one person. Lead managers include Nomura Holdings Inc, the people said.

“It’ll be hard to get the same valuation,” said Mitsushige Akino, a senior executive officer at Ichiyoshi Asset Management Co.

Rising global interest rates and inflation will make it difficult for stocks to trade at last year’s lofty price-earnings ratios, he said. “The markets may recover but the mechanism lifting valuations has changed.”

Piccoma plans to go public but details of the IPO, including the timing, continue to be under review, a company representative said without elaborating.

Owned 72.9% by Kakao and 18.2% by Kakao Entertainment, Piccoma is battling Line Corp, operator of Japan’s biggest messaging platform, to be the country’s most widely-used manga app.

Piccoma’s monthly readership hit a June quarter high of 9.5 million, compared with about two million in August 2017. That helped it rank eighth globally among non-gaming apps by monthly sales in June, according to data tracker data.ai.

The app offers the first few chapters of most cartoons for free. It charges users who want to keep on reading, while also offering the option to wait 24 hours before continuing a given cartoon without paying.

The approach struck a chord with readers and helped Piccoma capture new users when it was trying to crack the Japanese market.

A digital shift in Japan’s comics market has also fuelled Piccoma’s growth.

Digital manga sales climbed 20% in 2021 from the previous year, growing more than four-fold in seven years and accounting for more than 60% of the total US$5bil (RM22bil) market, according to a report published by All Japan Magazine and Book Publisher’s and Editor’s Association.

Piccoma swung to a profit for the first time in 2020, based on filings made to South Korean regulators. Its net income more than tripled to US$39mil (RM175mil) in 2021 on an 88% surge in sales. — Bloomberg