[Click e-Stock] "Kakao Pay Posts First Profit Since Listing... Target Price Raised"

On May 8, Shinhan Investment & Securities raised its target price for Kakao Pay from 34,000 won to 35,000 won.

Lim Heeyeon, a researcher at Shinhan Investment & Securities, stated, "Kakao Pay recorded its first consolidated operating profit since its listing," and analyzed, "We expect the company's long-term corporate value to rise, driven by visible improvements in the performance of non-banking financial subsidiaries in addition to its core business."

In the first quarter of this year, Kakao Pay posted revenue of 211.9 billion won and operating profit of 4.4 billion won. Revenue increased by 20.2% compared to the same period last year, and the company swung to an operating profit.

Specifically, in the Pay division, while the stagnation in monthly active users (MAU) has continued for a prolonged period, the proportion of active users is on the rise. Revenue continues to grow due to the recognition of insurance database sales income, and standalone operating profit reached 13.6 billion won.

In the securities division, operating profit was 3.5 billion won. Although the overall market saw a decline in overseas stock trading volume, the company successfully defended its revenue by expanding its market share.

In the insurance division, revenue is estimated at around 13 billion won, but the company continues to record operating losses due to insufficient experience data. However, expectations for profit improvement remain valid once three years of experience data have been accumulated.

Researcher Lim explained, "We are raising our target price to reflect changes in earnings estimates and adjustments to global peer multiples," and added, "The improvement in securities profit fundamentals, driven by increased overseas stock contracts and market share expansion, is expected to be a key factor in the company's long-term valuation re-rating."