[Into the Stock] SettleBank, 'Comprehensive Platform Big Picture' Based on Stable Earnings

Since February 18, Price Has Not Escaped the 30,000-Won Range
AI Payment and Mobile Payment Business Expansion Expected Next Year

[Asia Economy Reporter Gong Byung-sun] SettleBank, a fintech company providing electronic payment platforms, has maintained stable performance despite COVID-19, but its stock price remains stuck in the 30,000 KRW range. Attention is focused on whether future business expansion into a comprehensive payment platform can serve as a growth momentum.

According to the Korea Exchange on the 27th, SettleBank rose 4.51% this month, reaching the 30,000 KRW range. While this is a decent performance for the month, it appears somewhat sluggish when viewed over the year. Since hitting this year's high of 40,900 KRW on February 18, it has never surpassed the 40,000 KRW mark. As of 9:30 AM on the day, SettleBank recorded 32,050 KRW, up 2.4% (750 KRW) from the previous day.

Although the stock price is stuck in the 30,000 KRW range, the performance has been favorable. It recorded the highest quarterly sales for two consecutive quarters in Q2 and Q3 this year. Market consensus for Q4 is also positive. Sales are estimated at 28.1 billion KRW, up 27.39% year-on-year, and operating profit is expected to increase by 49.25% to 4.4 billion KRW during the same period.

The strong performance is backed by growth in SettleBank’s core business, the simple payment market. SettleBank’s main businesses include simple cash payment services, virtual accounts, and corporate customer fund management services such as firm banking. Among these, the simple cash payment service accounted for 41.7% of Q3 sales, making it the core of SettleBank. The simple payment market, which had an average daily transaction amount of 132.1 billion KRW in 2017, grew to 559 billion KRW in the first half of this year. With pay companies like KakaoPay and Coupang, as well as various e-commerce companies, emerging as major clients, future growth potential is secured.

Nevertheless, the lack of momentum is interpreted as the reason for the stagnant stock price. Although it consistently generates profits, it has not deviated from market expectations. Since launching the 010 Pay business in December last year, SettleBank has not attempted any notable new areas. There were expectations that the stock price would rise if consumption exploded with the gradual return to normal life under With COVID-19, but the spread of COVID-19 seems far from being controlled.

Attention is focused on whether the AI payment and mobile payment businesses, newly entering from next year, will serve as momentum. AI payment is a system that compensates for unpaid amounts due to cash shortages, a drawback of simple cash payments, by using other means such as credit cards. SettleBank is aiming to grow into a comprehensive payment platform by introducing mobile payments and securing various payment methods.

Lee Jong-won, a researcher at Sangsangin Securities, said, "There is potential for growth into a comprehensive payment platform, and the stock price is undervalued compared to the level of profits generated. Considering the cash flow generated by SettleBank, I recommend buying from a mid- to long-term perspective."

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