[Click eStock] KG Inicis, Now Showing the Signal of Growth

[Asia Economy Reporter Lee Seon-ae] Hana Financial Investment announced on the 21st that it maintains a ‘Buy’ rating and a target price of 28,500 KRW for KG Inicis. First, the transaction volume of KG Inicis’s major revenue-generating merchants in the global, small-to-medium, and hosting sectors continues to grow. In 2021, both top-line and profitability growth are expected due to increased transaction volume driven by new merchants and a growing cumulative number of users.

KG Inicis holds an exclusive reference with Netflix, so there is a high possibility of attracting additional merchants following the domestic market entry of global OTT platforms such as Disney Plus and Apple TV+ in 2021. Transaction volume is also expected to grow significantly with Apple’s upcoming new product launches. Furthermore, accelerated vaccine distribution and the implementation of travel bubbles are expected to expand the base effect from the recovery of transaction volumes in on-contact merchants such as travel, airlines, and ticketing.

Choi Jae-ho and Choi Won-jun, researchers at Hana Financial Investment, emphasized, "In conclusion, the expected price-to-earnings ratio (PER) of 9.6 times this year is a very undervalued range."

This year’s expected performance forecasts sales of 865.8 billion KRW (+6.9% YoY) and operating profit of 107.3 billion KRW (+9.5% YoY). This is attributed to transaction volume growth led by high-profit merchants in global, small-to-medium, and hosting sectors, expansion of new merchants in non-face-to-face transaction areas such as interior, resorts, and automobiles, and improved performance of major subsidiaries. Additionally, in the first quarter of this year, on- and offline integrated non-face-to-face payment services were launched with Hanwha Resort and Daemyung Resort, and in the second half, the launch of Toyota’s domestic online payment service and the simple payment platform GS Pay are scheduled, which are expected to contribute to annual transaction volume growth.