[Click eStock] NHN Korea Cyber Payment, Steady Growth Even in the Post-Corona Era

[Asia Economy Reporter Lee Seon-ae] NH Investment & Securities forecasted on the 28th that NHN Korea Cyber Payment will continue to grow steadily in the post-COVID-19 era. However, they did not provide an investment opinion or target price.

NHN Korea Cyber Payment is the leading online comprehensive payment service provider in Korea, operating PG, VAN, and O2O businesses, and is growing alongside the online shopping market. NH Investment & Securities noted concerns about market growth slowing after 2022, when the endemic transition is underway, but considering the emergence of various online business models and the continuous influx of overseas merchants, they judged that doubts about growth can be dismissed.

In 2021, sales reached KRW 745.4 billion (+19.3% y-y), and operating profit was KRW 43.2 billion (+8.5% y-y, operating margin +5.8%). The sales growth rate was similar to the online shopping market growth rate (+19.6% y-y, KRW 193 trillion), but the operating profit growth rate was relatively

low due to a decline in mix commission rates caused by market growth focused on large merchants, continued sluggishness in travel and accommodation overseas merchants, and ongoing deficits from increased marketing expenses in the O2O business. However, growth rates are expected to demonstrate high growth starting from the low point in 2021. Shim Eui-seop, a researcher at NH Investment & Securities, stated, "Since the COVID-19 outbreak, the proportion of large merchants in the company's payment amount has risen to over 90%, and the possibility of profit margin decline due to further increases in the proportion of large merchant payments is considered limited," adding, "Rather, the influx of overseas merchants with higher commission rates and the continuous increase in payment amounts are expected to drive profit margins up again."

In 2022, transaction amounts from overseas merchants are expected to increase by 42.7% (y-y), and the proportion of overseas merchant payments is projected to rise from 11.9% in 2021 to 14.3% in 2022. Researcher Shim emphasized, "The company's valuation will also be re-rated," and added, "It is time to pay renewed attention to the company, which will continue steady growth in the post-COVID-19 era."