Korea Investment & Securities analyzed that the turnaround to profit for Kakao Pay in the first quarter of this year is positive, but considering growth rates and other factors, the investment attractiveness is still not substantial. It maintained a 'neutral' investment opinion. The closing price of Kakao Pay on the previous trading day was 26,700 won.
Korea Investment & Securities projected that Kakao Pay's revenue in the first quarter of this year would increase by 26.3% year-on-year to 222.8 billion won, with an operating profit turning to a surplus of 7.6 billion won. This figure exceeds the market expectation of an operating profit of 5.5 billion won. In particular, it is expected that the revenue from the payment division will increase by 7.5% year-on-year to 128.9 billion won.
Jeong Ho-yoon, a researcher at Korea Investment & Securities, said, 'The transaction amount for Kakao Pay in the first quarter will be 12.5%, and while the growth rate may slightly decline compared to the previous quarter, it will still continue double-digit growth.' He noted, 'The revenue from the financial division is estimated to increase by 76.3% year-on-year to 88 billion won, and the high growth trend will continue due to the stable aspects of loan brokerage and the effect of raising commission rates for overseas stock transactions that began in the fourth quarter of last year.'
However, Korea Investment & Securities pointed out that while the turnaround to profit due to the commission increase effect for Kakao Pay Securities is positive, consistent performance growth remains uncertain. Research Institute Jeong noted, 'The payment division, which accounts for about 60% of revenue, saw its growth rate fall to single digits due to a higher base and a slowdown in both online and offline consumption, and considering that the growth rate boost from the commission increase will normalize after one year, the investment attractiveness of Kakao Pay is not high yet.'
He added, 'The direction of the turnaround to profit is clear, but the absolute profit size is still not large, and even when compared by the price-to-sales ratio (PSR), the valuation compared to global fintech peers is burdensome.'