[Click eStock] "KakaoPay, Securities Deficit Reduction Expected... Target Price Up"

Shinhan Investment Corp. evaluated on the 3rd that Kakao Pay is expected to recover operating profit centered on securities. Accordingly, it maintained a 'Buy' investment rating and raised the target price to 34,000 KRW.

Researcher Lim Hee-yeon of Shinhan Investment Corp. said, "We expect a reduction in losses for Pay Securities due to an increase in overseas stock trading volume and a recovery in the real estate PF market."

Researcher Lim added, "It is a situation where we can even expect a turnaround to consolidated operating profit as early as 2025," and explained, "2025 is expected to be the first year of a performance turnaround."

Shinhan Investment Corp. forecasts Kakao Pay Securities' operating loss in 2025 to be 8.3 billion KRW (continued deficit). Researcher Lim explained, "We expect a reduction in losses of about 20 billion KRW compared to 2024," and "We anticipate profitability improvement due to an expansion of overseas stock trading volume and new real estate PF deals, as well as cost control."

In November 2024, the average daily overseas stock trading volume in the market recorded 4.6 trillion KRW, and the quarterly custody fee is on the verge of reaching 10 billion KRW.

Researcher Lim projected, "Assuming a 5% market share in overseas stocks, a 10bp fee rate, and a 20% fee expense ratio, the quarterly fee profit and loss per 1 trillion KRW of average daily trading volume is estimated at 2.4 billion KRW."