[Click eStock] "KakaoBank Diversifies Platform Revenue... Expected to Stand Out in a Low-Interest Rate Environment"

Stocks Overlooked Amid Financial Sector Rally
Aggressive Growth Pauses, Focus Shifts to Strengthening Platform Competitiveness
Potential Attention as Interest Rate Cuts Begin in Second Half

Hana Securities analyzed on the 27th that KakaoBank is being overlooked amid the strength of traditional financial stocks and is highly likely to attract attention during a period of declining interest rates. They maintained a 'Buy' investment rating and a target price of 37,000 KRW. KakaoBank's closing price on the previous trading day was 28,850 KRW.

Researchers Choi Jung-wook and Kim Hyun-soo of Hana Securities stated, "While traditional banks' stock prices are rising due to expectations of the recent introduction of corporate value-up programs, KakaoBank is being left out of this trend," adding, "Its current price-to-book ratio (PBR) of 2.1 times makes it difficult to consider it a low PBR stock, and it is also hard to expect the shareholder return ratio to significantly increase to the level of commercial banks within a short period."

The two researchers said, "Following a 35% profit growth in 2023, nearly 20% profit growth is expected this year as well, indicating a favorable fundamental trend," and added, "There is a high possibility of PBR increase, and given its characteristics as a growth stock, it is likely to attract attention if interest rate cuts begin in the second half of the year."

KakaoBank recorded approximately 40% loan growth over the past year. Using lower loan interest rates compared to commercial banks as a weapon, it significantly increased mortgage loans by 8 trillion KRW, showing a typical high-volume, low-margin pattern. Researchers Choi Jung-wook and Kim Hyun-soo commented, "This type of growth is inevitably temporary and difficult to sustain," adding, "We believe the company is returning to its initial management strategy at launch, which emphasized deposit bases over loans and focused on generating revenue through platform business, aiming to be evaluated as a financial platform."

This means they have shifted from aggressive growth policies to establishing themselves as a platform. In fact, KakaoBank started fund sales in January, and from the second quarter, new services such as public offering subscriptions and foreign exchange products are also waiting in line, which is expected to serve as an opportunity to diversify and expand platform revenues. The net profit for the first quarter is expected to grow by 11.1% compared to the same period last year, reaching 113 billion KRW.