[THE INVESTOR] Kakao’s fintech momentum including Kakao Pay and Kakao Bank is likely to garner attention again, said Shinhan Investment on July 13, maintaining a “buy” recommendation and 140,000 won (US$124.68) target price. 

Its revenue in the second quarter will come in at 596.8 billion won with operating profit of 24.3 billion won, missing the 30.4 billion won market consensus. It was burdened by continuous heavy spending on marketing for Kakao Pay, but the earnings have advanced significantly from the previous quarter. Its fin-tech sector is still drawing expectations, and the success of its payment service hinges on expanding offline transactions. It has enabled payment through QR codes and bar codes since May and has been securing small and medium businesses as clients and users. Its low commission rate will let it expand its client base fast, said analyst Lee Mun-jong.

Linking banking and payment services and expanding application-to-application payments will lead to loans for smaller business operators in the long term, noted the analyst adding that growing voices for easing regulations on separation of banking and commerce is also a positive. 

By Hwang You-mee (glamazon@heraldcorp.com)