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Bang Si-hyuk, co-CEO of Big Hit Entertainment. (Hankyoreh archives)

If Big Hit Entertainment, BTS’ management company, goes public next month, Bang Si-hyuk, the company’s co-CEO and majority shareholder, is expected to become one of South Korea’s 10 wealthiest people in terms of stock holdings.

The prospectus filed by Big Hit Entertainment shows that Bang would hold a 36.6% stake in the company (12,377,337 shares) following the initial public offering (IPO). If the offering price is set at 135,000 won (US$113.73), at the upper end of the intended range, Bang’s stake would be valued at 1.67 trillion won (US$1.41 billion). That would rank him 14th in terms of listed stock, ahead of Lee Boo-jin, president of Hotel Shilla, who is valued at 1.6 trillion won (US$1.35 billion). Bang’s stake in the company would be worth five and a half times the shares held by Park Jin-young, entertainer and president of JYP Entertainment, who currently owns the most stock, at 256.6 billion won (US$216.2 million).

If Big Hit Entertainment’s opening price is set at double the offering price and then goes up 30% more, as SK Biopharmaceuticals did on its first day of trading, Bang’s share in the company would be valued at 4.34 trillion won (US$3.66 billion), pushing him above Hyundai Motor Group Chairman Chung Mong-koo (4.26 trillion won, or US$3.59 billion) to fifth place in terms of stock wealth.

But a considerable number of analysts think that Big Hit Entertainment’s IPO price is already inflated and is unlikely to soar so high. “The upper range of Big Hit Entertainment’s offering price has a price-earnings ratio of 61 to 1, compared to the entertainment industry average of 30 to 35. That means a blue chip premium has been applied,” said Kim Hyeon-yong, an analyst with eBest Investment and Securities. Another factor that could depress the stock price is the imminent prospect of military service for the members of BTS, the group that accounts for 88% of the company’s sales.

The recent fad in public stock offerings has also benefited Bang Jun-hyuk, chairman of Netmarble, who ranks sixth in terms of equity at 4.09 trillion won (US$3.45 billion). Netmarble holds a 24.87% share in both Big Hit Entertainment and Kakao Games (5.63%), which will hold its IPO on Sept. 10.

The boom in biotechnology and a shift to online activities amid the COVID-19 pandemic has also shaken up the top ranks of stockholders. Seo Jung-jin, chairman of Celltrion (5.33 trillion won, or US$4.49 billion), and Kim Beom-soo, chairman of Kakao (5.03 trillion won, or US$4.24 billion), have risen to third and fourth place, respectively, following Lee Kun-hee, chairman of Samsung Electronics (17.06 trillion won, or US$14.37 billion), and his son Lee Jae-yong, vice chairman of Samsung Electronics (7.02 trillion won, or US$5.91 billion). In addition to his personal share in Kakao, Kim Beom-soo also has a 11.3% indirect share via K Cube Holdings, a management consulting firm that Kim owns outright. Therefore, his effective stake in Kakao (25.4%, 22,440,098 shares) is worth 9.02 trillion won (US$7.6 billion). K Cube Holdings also has a 1.3% stake (746,500 shares) in Kakao Games.

By Han Gwang-deok, finance correspondent

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