[Click eStock] "Aton, Mobile OTP Performance Expected to Improve... Target Price Maintained"

[Asia Economy Reporter Myunghwan Lee] Hana Financial Investment announced on the 9th that it maintains a buy rating and a target price of 55,100 KRW for Aton. This is due to the expected strong performance of the company's core business, mobile OTP.

The reason for maintaining the buy rating is the expectation of expanded domestic mobile OTP sales following the Presidential Transition Committee's push to introduce mobile OTPs in all banks. The activation of overseas market entry for mobile OTP services and steady performance growth in the core business were also cited as reasons.

The company's consolidated sales for the first quarter of this year increased by 7.9% year-on-year to 9.3 billion KRW, and operating profit rose by 121.1% to 1.5 billion KRW. The sales composition is fintech security solutions (38.5%), smart finance (20.3%), fintech platform (19.3%), and others (21.9%). The product-wise proportions maintained past trends, and Hana Financial Investment evaluated positively the increase in other sales due to the turnaround to profitability in the first quarter of subsidiaries including Aton Mobility.

The 110 national tasks announced by the Transition Committee in May included a plan to encourage the introduction of mobile OTPs in all banks. Hana Financial Investment analyzed that Aton is expected to benefit as it holds the largest market share in the domestic mobile OTP market. Since the number of OTP issuances is directly linked to sales, related sales are expected to grow significantly.

Overseas sales are also expected to grow. It is anticipated that a favorable environment will be created as Shinhan Vietnam Bank, the top foreign bank, accelerates its digital transformation strategy. As of the end of May, Aton's overseas mobile OTP issuance volume was about 1.48 million, with 70% issued in Vietnam. Aton is already supplying mobile OTP services to Shinhan Vietnam Bank, so overseas sales expansion is expected.

Hana Financial Investment forecasts that Aton's sales this year will increase by 30.7% year-on-year to 57 billion KRW, and operating profit will rise by 45.1% to 13.2 billion KRW.

Researcher Dohyun Kim of Hana Financial Investment said, "We have momentum in expanding new services related to fintech security solutions for existing clients and domestic and overseas sales related to mobile OTP." He added, "Considering the expected future expansion of solutions and business for virtual asset exchanges, the company's growth potential and stock upside remain intact."

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