[Click eStock] "Daou Technology, Leveling Up Corporate Value Through Growth in Its Own Business"

[Asia Economy Reporter Hyungsoo Park] NH Investment & Securities analyzed on the 23rd that despite considering discount factors, the current stock price of Daou Technology is excessively undervalued.

Baek Joon-gi, a researcher at NH Investment & Securities, explained, "Daou Technology is undervalued compared to Daou Data due to its rooftop structure of corporate governance," adding, "The divergence rate between NAV and market capitalization has been continuously expanding. The 2020E PER is only 4.6 times, and the discount rate compared to net asset value (NAV) reaches 53%."

He continued, "Kiwoom Securities, which accounts for 90% of consolidated operating profit, is rapidly improving its business conditions as retail customers surge," and added, "There is a high possibility of expanding additional server and system investments due to the occurrence of IT-related complaints."

Furthermore, he emphasized, "Daou Technology recorded sales of 44.6 billion KRW and an operating profit margin of 31% last year solely from the IT service business, including Kiwoom Securities," and stated, "Additional IT investments by Kiwoom Securities are factors increasing Daou Technology's separate operating profit."

Researcher Baek estimated, "On a consolidated basis, sales will reach 3.2266 trillion KRW and operating profit 479.2 billion KRW," describing it as "performance at last year's level."

He predicted, "Consolidated performance is not the most important factor explaining Daou Technology's stock price," and forecasted, "Separate sales and operating profit, which determine corporate value, will grow to 252 billion KRW and 46 billion KRW, respectively."

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