[Click eStock] "Danal Poised to Benefit Most from Expansion of Cryptocurrency Payments"

On December 17, Yuanta Securities stated that Danal is the only domestic payment company to have processed cryptocurrency payments through hundreds of thousands of affiliated merchants, and predicted that it will be the biggest beneficiary of the future introduction of a Korean won stablecoin.

Danal, which developed and commercialized the world’s first mobile phone payment service, continues to hold the largest market share in the domestic mobile payment market. Recently, the company signed an exclusive agreement as the sole integrated operator (Master Aggregator) in Korea with Binance, the world’s largest cryptocurrency exchange, securing exclusive rights to recruit Korean merchants for the Binance Pay service.

Although the legislation of the Korean won stablecoin has recently stalled, there is an expectation that Danal will perform strongly if progress is made. Lee Changyoung, a researcher at Yuanta Securities, explained, “Danal is the only domestic payment company to have issued the cryptocurrency Paycoin (PCI) in 2019 and processed actual cumulative payments of 25 billion won through approximately 150,000 merchants.” He added, “In 2024, Danal obtained a patent related to offline payments using cryptocurrency, and is in the most advantageous position among payment companies for the introduction of a Korean won stablecoin in Korea.”

Lee further emphasized, “Danal has developed and operated a system capable of handling the entire process from cryptocurrency issuance, distribution, payment, remittance, to settlement. Based on this experience, Danal is in the final stage of technology verification (PoC) for building a compatibility system with domestic financial institutions for the Korean won stablecoin. Danal is the only company that can also integrate this system with overseas virtual asset exchanges and global payment companies such as PayPal, WeChat Pay, and Mastercard.”

Danal’s cumulative sales for the third quarter of this year were 169.5 billion won (down 17% year-on-year), operating profit decreased by 29%, and net loss stood at 54.2 billion won, indicating an overall business contraction. This was due to a significant increase in the value of 35 billion won worth of convertible bonds (conversion price: 3,136 won) issued on October 30 of last year, resulting in a derivative valuation loss of approximately 93.2 billion won as the stock price rose.

Lee noted, “However, this is an accounting loss with no cash outflow, and since most of the convertible bonds have already been converted into shares, there are currently no overhang issues. In addition, losses in business segments other than payments have been reduced, leading to an improvement in operating margin.”