[Click eStock] "SettleBank, No Worries Despite Weak Q1 Performance"

by Keum Boryeong

Published 20 May.2020 08:22(KST)

SK Securities Presents 'Buy' Investment Opinion and Target Price of 44,000 Won... Closing Price on 19th at 27,650 Won

[Click eStock] "SettleBank, No Worries Despite Weak Q1 Performance"

[Asia Economy Reporter Kum Boryeong] Although SettleBank showed weak performance in the first quarter of this year, analysis suggests there is no need for concern.

According to SK Securities on the 20th, SettleBank's first-quarter results this year were sales of 16.78 billion KRW and operating profit of 2.09 billion KRW. Compared to the previous year, sales increased by 9.2%, but operating profit decreased by 40.4%.

The decline in operating profit compared to last year is due to two factors. First, the rapid increase in the usage ratio of local currency, which has low profitability among simple cash payment services, affected the profit margin decrease. Second, with the implementation of open banking, some regional banks reduced their use of SettleBank's payment platform.

However, SK Securities forecasts SettleBank's sales for this year to increase by 36% from the previous year to 89.2 billion KRW, and operating profit to grow by 38% to 18.5 billion KRW. Researcher Seo Chungwoo of SK Securities stated, "Despite the weak first-quarter performance, the reason for expecting high growth this year is the explosive increase in new clients recently, benefiting from government cash activation policies such as income deduction benefits and the activation of untact consumption," adding, "This year, the simple cash payment solution has entered the transportation payment market (KORAIL, Cashbee, etc.) as well as the dawn delivery payment market such as Oasis Market, and it is estimated that the solution will be provided to domestic large corporations and global companies in the second half of the year. In particular, clear performance growth is expected in the second half."