[Click eStock] "NHN Korea Cyber Payment Should Be Approached from a Mid- to Long-Term Perspective"

Post-COVID-19 Recovery Expected in Total Transaction Volume of Hotel Companies
KTB Investment & Securities Maintains NHN Korea Cyber Payment Target Price at 65,000 Won

[Asia Economy Reporter Gong Byung-sun] NHN Korea Cyber Payment's overseas expansion is expected to drive mid- to long-term growth. Domestically, the increase in online shopping due to COVID-19 positively impacted its performance.

On the 29th, KTB Investment & Securities estimated NHN Korea Cyber Payment's Q3 revenue this year to be 198.6 billion KRW, a 9% increase from the previous quarter, and operating profit to be 11.7 billion KRW, a 5% increase over the same period. Among these, the total transaction amount (GMV) of the Payment Gateway (PG) division is expected to rise 9% from the previous quarter to 8.3 trillion KRW.

The contribution of overseas performance is expected to be somewhat lower compared to domestic results. KTB Investment & Securities projected domestic GMV to increase 10% from the previous quarter to 7.1 trillion KRW, while overseas GMV is expected to grow 5% during the same period to 1.2 trillion KRW.

Researcher Kim Jin-gu of KTB Investment & Securities explained, "The reason for judging that overseas GMV growth will be lower than domestic is due to the base effect from the increase in domestic deliveries of Tesla Model Y in Q2," adding, "Domestic GMV also considered the effect of increased online shopping due to the resurgence of COVID-19."

Nevertheless, overseas business is also expected to achieve mid- to long-term growth. The GMV of key merchants such as Google is anticipated to increase as early as Q4, contributing to performance. Additionally, new merchants such as global online video service (OTT) providers will be added in the future.

The post-COVID-19 era is also expected to impact overseas performance. Hotel-related companies Expedia and Hotels.com, added as new merchants in March last year, are expected to recover GMV during the post-COVID-19 period. Expedia and Hotels.com recorded a GMV of 1.4 trillion KRW in 2019 before the COVID-19 outbreak. Researcher Kim said, "Expedia and Hotels.com can recover GMV amounting to 1.1 trillion KRW annually," adding, "This will be reflected sequentially in performance starting from the first half of next year."

Accordingly, KTB Investment & Securities maintained its investment opinion of "Buy" and target price of 65,000 KRW for NHN Korea Cyber Payment. The closing price on the previous day was 49,450 KRW.