Coca Cola Bottles, Korean FinTech Frenzy – Breakingviews
– Coca-Cola Europacific Partners
– Kakao Pay IPO
Short of sparkling. The European distributor of Coca-Cola suffers from a lack of liquidity. Coca-Cola Europacific Partners said Thursday that sales increased by 54% in one year in the second quarter to 3.6 billion euros, against 3.3 billion euros expected by analysts. The $ 26 billion company is benefiting from the end of lockdowns and out-of-home consumption. And he still has the lion’s share of the earnings from his acquisition of Australian Coca-Cola Amatil to look forward to next year.
It’s a good result, but you wouldn’t know it. Sales barely beat those recorded in the company’s shares in Amsterdam, Madrid or London. The stock was down 1.7% in Spain and up 0.5% in the Netherlands. That’s because most of his trading takes place in New York City. This hardly makes sense for a European company whose turnover is mainly in euros and a narrow free float of 44%. Lowering its quotes, most likely to focus on Amsterdam, would increase liquidity and reduce costs. (By Dasha Afanasieva)
IPO pop. The fintech craze in South Korea has reached new heights. The wealth payments management branch of the owner of the super-app Kakao reduces the price range of its IPO by about 6% after regulators ordered him to revise his statements. Kakao Pay’s business will now be worth around $ 10 billion, or 27 times 2021 annualized sales. Brazilian fintech services PagSeguro and StoneCo and US electronic lender Upstart trade an average of 16 times.
The company’s advantage is its $ 60 billion parent company. As of June, Kakao’s messaging platform had 46 million local users, nearly 90 percent of South Korea’s population. This has spurred the growth of payments: Transactions have grown at an 89% annual rate since 2018 and reached 12.5 trillion won ($ 10.8 billion) last year, according to analysts at Daiwa.
Dizzying valuations have become a norm in South Korea’s fashionable fintech industry. Subsidiary Kakao Bank, whose shares jumped 80% when they debuted last month, are now 15 times book value, well above traditional lenders. But justifying these sums requires creative evaluations. (By Robyn Mak)
(The Kakao Pay element has been corrected to indicate that transactions have grown at an 89% annual rate since 2018 and reached 12.5 trillion won ($ 10.8 billion) last year.)