In the Contactless Era, Online Payment Stocks Bloom

Q1 Payment Sector Sales Up 20% and Operating Profit Up 17% for 3 Companies
Stock Prices Also Hit 52-Week Highs

On the 8th, the third day since the transition to daily quarantine, a notice regarding prevention of the novel coronavirus infection is displayed at the COEX food court in Gangnam-gu, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Minwoo Lee] As the non-face-to-face (untact) culture spreads due to the novel coronavirus infection (COVID-19), the performance of domestic online electronic payment companies has surged. In the first quarter, the payment divisions of the three major companies recorded double-digit growth in sales and operating profit, while their stock prices also hit 52-week highs.

According to the Financial Supervisory Service's electronic disclosure on the 11th, the combined payment division performance of the three major electronic payment companies?NHN Korea Cyber Payment, KG Inicis, and KG Mobilians?in the first quarter showed sales of 306 billion KRW and operating profit of 28.1 billion KRW. Compared to the same period last year, sales increased by 20.2% and operating profit by 17%. The domestic online shopping transaction amount in the first quarter rose by 16.6% year-on-year to 36.8381 trillion KRW, leading to an expansion in the performance of payment companies.

NHN Korea Cyber Payment recorded sales of 142 billion KRW and operating profit of 8 billion KRW in the first quarter, representing increases of 31.2% and 51.7%, respectively, compared to the same period last year. The transaction amounts of social commerce companies such as Coupang and Tmon surged, resulting in the largest growth among the three companies. KG Inicis and KG Mobilians also grew steadily. KG Inicis posted first-quarter payment division sales of 126.7 billion KRW and operating profit of 11 billion KRW, up 11.5% and 6.3%, respectively, from the first quarter of last year. The increase in transaction amounts centered on delivery applications and Netflix was a key factor. KG Mobilians recorded sales of 37.3 billion KRW, up 13.9% year-on-year, boosted by the merger with the credit card electronic payment agency (PG) company 'Allat.' Operating profit rose 9.1% to 9.2 billion KRW.

Stock prices are also on the rise. All three companies hit 52-week highs last week. NHN Korea Cyber Payment reached 43,750 KRW on the 7th, the highest price since August 2015. KG Inicis and KG Mobilians also set their highest prices since July 2018 on the 6th, reaching 25,150 KRW and 9,740 KRW, respectively.

Strong performance of electronic payment companies is expected to continue in the future. The untact culture has already taken root, and transaction amounts in travel, aviation, and ticket sectors, which sharply declined due to COVID-19 issues in the first quarter, have been slightly increasing since last month. Juwon Ahn, a researcher at Hana Financial Investment, said, "Online consumption is growing rapidly in the untact era, and especially as middle-aged and older adults emerge as major customers of online shopping, the dominance of the distribution market is expected to further shift online." He added, "This year, electronic payment companies will focus on expanding their scale, and profits will steadily grow as well."

This content was produced with the assistance of AI translation services.