[Click eStock] "KakaoPay Expected to Continue Losses in Q2"

On the 14th, Korea Investment & Securities predicted that KakaoPay would continue to incur losses in the second quarter. The investment rating was set to 'Neutral', and no target price was disclosed.

Jung Ho-yoon, a researcher at Korea Investment & Securities, stated, "Second-quarter revenue is expected to increase by 21.6% year-on-year to 163.1 billion KRW, and the operating loss is projected to be 4.8 billion KRW, exceeding consensus estimates."

Revenue from the payment business division is expected to rise by 20.9% year-on-year to 113.4 billion KRW. KakaoPay's transaction volume is forecasted to grow by 18.3% year-on-year to approximately 34.4 trillion KRW. Payment-related transaction volumes are also expected to maintain solid growth both online and offline. Revenue from the financial business division is projected to increase by 25.6% year-on-year to 42 billion KRW, with loan-related revenue recovering and retail-related revenue from KakaoPay Securities also expected to increase.

KakaoPay has provided guidance for a transaction volume growth rate of 15-20% and revenue growth rate of 20-30% for 2023. Researcher Jung assessed, "Due to Kakao's commerce division restructuring and transaction volume growth from external merchants, payment-related transaction volumes still appear to be outpacing the overall transaction volume growth rate."

He added, "Starting in 2023, KakaoPay plans to increase usage among overseas tourists through offline payment expansion and collaborations with overseas payment providers such as Alipay and PayPay. Financial services will expand loan product categories to include jeonse (key money deposit), mortgage, and automobile loans, and from this year, KakaoPay Securities will expand its market share (M/S) in overseas stock markets to grow retail commission revenue."

Although external growth continues steadily, the relatively high valuation compared to global fintech companies remains a burden. This is because more time is needed to improve profitability, which is a crucial investment point.

Researcher Jung said, "Profitability improvement is expected to gradually begin from 2024 due to an increasing proportion of prepaid transactions in the payment business and a reduction in losses at KakaoPay Securities. It is not too late to start buying gradually after confirming profitability improvements."

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