[Click eStock] Kona I, Expected Beneficiary of Local Currency Revitalization

[Asia Economy Reporter Hyunseok Yoo] Research Alom analyzed on the 17th that Kona I is expected to benefit from policies promoting local currency activation. The investment opinion is positive with a target price of 23,000 KRW.

Researcher Seonghwan Choi of Research Alom said, "Concerns about economic contraction due to the novel coronavirus are becoming a reality, and although the government's budget execution for economic stimulus is accelerating, its effectiveness is questionable," adding, "Ahead of the general elections in April, both ruling and opposition parties are striving to prepare policies to revitalize the local economy."

He continued, "There is a proven effective policy for local economic revitalization, which is the issuance of ‘local currency’," and said, "Last year, Incheon City achieved approximately 1.5 trillion KRW in transaction amounts, earning remarkable results in revitalizing the local economy. Interest in the company’s ‘local currency’ platform is expected to rise ahead of the general elections."

Researcher Choi emphasized the need to pay attention to Kona I’s local currency platform. He said, "Kona I is the number one domestic provider of ‘local currency’ platforms, currently servicing Incheon City, Gyeonggi Province, Yangsan in Gyeongnam, Daedeok in Daejeon, and Dong-gu in Busan," adding, "Incheon City is expected to achieve 3.7 trillion KRW in local currency transactions this year, and Gyeonggi Province is also expected to drive policies after the general elections, so high growth is anticipated."

He also expected performance improvement in the smart card sector. He explained, "There are numerous momentum factors for performance improvement in the smart card sector, with a supply contract for metal cards with American Express expected to add more than 30 billion KRW in sales this year," and added, "As a measure to prevent credit card fraud, fingerprint recognition cards are being introduced, and the company is expected to benefit as a supplier of fingerprint recognition cards for VISA and Master."