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SEOUL - The Pinkfong Company, the global family entertainment enterprise behind the viral sensation "Baby Shark," has successfully concluded its general public offering subscription, amassing approximately KRW 8 trillion (approximately USD 6.1 billion) in subscription deposits. This massive influx of capital underscores strong investor confidence as the company prepares for its debut on the Kosdaq market, aiming to replicate the success of domestic peers like SAMG Entertainment, producer of the hit character 'Hatchimals' (Hachu-ping).
The company, formerly known as SmartStudy, finalized its two-day public subscription on November 7, with a total of about 470,000 applications processed through co-lead underwriters Mirae Asset Securities and Samsung Securities. Competition rates were fiercely high, registering at 916.27:1 and 734.71:1, respectively.
The public offering price was determined at KRW 38,000, the top end of the proposed price range, following a successful institutional demand forecast that concluded on November 3. The IPO will see the issuance of 2 million shares, raising a total of KRW 76 billion in public funds. Upon listing on the Kosdaq on November 18, the company's estimated market capitalization is projected to be KRW 545.3 billion.
Established in 2010, The Pinkfong Company has built its empire on intellectual property (IP) for young children, featuring iconic characters like Pinkfong, Baby Shark, and Bebefinn. The flagship content, "Pinkfong Baby Shark Dance," holds the record for the world's most-viewed YouTube video, boasting a cumulative 16.3 billion views.
The firm's reliance on global appeal is evident, with overseas sales accounting for a significant 76% of its consolidated revenue in the first half of this year. The company plans to utilize the funds secured through the IPO to accelerate the development of new IP and further expand its global footprint.
The listing is seen by many as being spurred by the remarkable growth of competitor SAMG Entertainment, famous for 'Hachu-ping.' Despite a recent price dip from its peak, SAMG Entertainment’s stock soared over 200% this year, even recording the highest H1 return on the domestic stock market at 621.92%. The tremendous popularity and sales performance of characters like Hachu-ping have demonstrated the lucrative potential of the children's entertainment market. In calculating its offering price, The Pinkfong Company selected SAMG Entertainment, along with Japan's Toei Animation, Kadokawa, and Sanrio, as comparable companies.
However, the IPO is not without its cautionary notes. Concerns have been raised over The Pinkfong Company's inconsistent financial performance. While the company recorded KRW 116.9 billion in sales and a net loss of approximately KRW 250 million in 2022, the following year saw sales drop to KRW 87.8 billion and the net loss balloon to KRW 18.3 billion. Although the company rebounded in the last fiscal year, achieving a net profit and improved sales, these figures remained below the 2022 levels. The volatile financial history presents a potential risk factor amidst the current market optimism.
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