[Click eStock] "Nice Information & Telecommunication, Expected to Benefit from Untact and Revenge Spending"

[Asia Economy Reporter Oh Ju-yeon] KB Securities analyzed that NICE Information & Telecommunication is showing growth in its performance as a payment platform, with a stable Value-Added Network (VAN) business and a high-growth electronic payment gateway (PG) business, and expects it to benefit from retaliatory consumption after the COVID-19 pandemic.

According to KB Securities on the 20th, NICE Information & Telecommunication's VAN payment performance has been steady except for about two weeks after the spread of COVID-19. Researcher Lee Byung-hwa analyzed, "The first quarter results recorded sales of 116.9 billion KRW and operating profit of 5.8 billion KRW, with the VAN segment decreasing by 8.5% year-on-year, while the PG segment increased by 26.5%."

He explained, "The decline in VAN performance is limited, and the high growth of PG continues," adding, "Operating profit decreased due to increased marketing expenses aimed at raising the market share of VAN and PG."

In particular, as of the first quarter, the sales proportion of PG increased to 57% from 50.3% in the same period last year, and the PG segment is expected to continue benefiting from the growth of major clients such as Baedal Minjok and Coupang Rocket Pay.

He also saw a high possibility of benefits to the offline VAN segment from the explosive increase in deferred consumption as the COVID-19 situation stabilizes.

Researcher Lee emphasized, "Various support funds provided by local governments, including the government's emergency disaster relief funds, are also highly likely to contribute to the improvement of NICE Information & Telecommunication's offline VAN performance," adding, "Attention should be paid to the recovery trend of VAN performance, which declined during the pandemic in the first quarter."

However, he added that concerns about intensified competition and growth stagnation in the VAN market, as well as policy risks such as fee reductions, are ongoing, and confirmation of the resolution of these negative factors through profitability recovery is necessary.

Meanwhile, NICE Information & Telecommunication is the No. 1 VAN operator in Korea. The VAN business has maintained its market-leading position since 2014. Its 100% subsidiary NICE Payments operates the PG business.

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