[Click eStock] "NHN KCP, Growth Continues with Merchant Expansion"

NH Investment & Securities recently maintained its investment rating for payment company NHN KCP, whose stock price has experienced sharp fluctuations due to the recent domestic entry of Chinese companies Ali and Temu, at 'Buy' with a target price of 15,000 KRW. The outlook is that the company’s scale and profitability will continue to grow in the medium to long term as it expands its overseas merchant base.

Yoon Yudong, a researcher at NH Investment & Securities, stated, "The business performance from newly added merchants last year, including online video services (OTT), travel agencies, and online shops, is expected to be reflected starting this year," adding, "Additionally, as online shopping transaction volumes increase, a favorable business environment is being created for NHN KCP, which holds the number one market share in the online payment (PG) sector."

Researcher Yoon also noted, "Chinese merchants such as Ali and Temu are rapidly penetrating the Korean e-commerce market," and forecasted, "Although the current transaction volume is not large, the market share of Chinese platforms is steadily expanding." He further mentioned, "Since the end of last year, NHN KCP has been negotiating with more companies based on references related to Chinese platforms and plans to sequentially announce well-known merchants this year."

He estimated, "With strong performance from merchants in various sectors such as reopening, imported cars, and OTT, the quarterly transaction volume through NHN KCP is estimated to have increased by 12% year-on-year to 11 trillion KRW," and projected, "Based on this, consolidated sales are expected to rise 8.7% year-on-year to 246.1 billion KRW, and operating profit to increase 9.5% to 9.8 billion KRW, in line with the average market forecast." He added, "Although there were no new large-scale merchants added in the first quarter, preparations are underway to announce new companies in units of the first and second halves of the year."

However, he noted, "Costs will slightly increase due to bonus payments," but predicted, "Since priority is given to scale growth this year, profit margins are expected to improve over time."