Kakao Pay slams on the brakes as stock trading value shrinks ... What’s its next growth play?

[Financial News] Korea Investment & Securities forecast on the 26th that Kakao Pay’s third-quarter results this year would fall short of market expectations due to a decline in stock trading value. It maintained its rating at “Neutral.”
Ho Yoon Jung, an analyst at Korea Investment & Securities, said, “We expect third-quarter revenue and operating profit to come in at 305.6 billion won and 31.7 billion won, respectively,” adding, “Operating profit will fall short of the consensus estimate of 37.3 billion won.” Revenue is projected to rise 28.2% year over year and operating profit 100.4%, but to decline 8.8% and 46.0%, respectively, from the previous quarter.
The payment business is expected to continue growing. Analyst Jung said, “Revenue in the payment business division will be 145.3 billion won, with double-digit growth continuing in the third quarter,” adding, “Transaction volume at payment outlets outside Kakao Corp.’s affiliates continues to grow steadily, while growth in transaction volume at Kakao Commerce is also expected to recover.” The projected revenue represents increases of 12.0% year over year and 2.8% from the previous quarter.
By contrast, revenue in the financial business division is expected to decline from the previous quarter. Analyst Jung said, “Revenue in the financial business division is expected to fall to 142.6 billion won, down from the previous quarter,” explaining, “This is because retail revenue at Kakao Pay Securities, which has driven growth to date, will decline as a result of lower stock trading value.”
Analyst Jung also stressed the need for a new growth driver. He said, “Given that a substantial part of the earnings improvement over the past year was underpinned by growth at Kakao Pay Securities, a new growth engine such as stablecoins is now needed.” He added, “Discussions related to digital asset legislation are currently moving toward incorporating a range of potential uses for stablecoins, including remittances and payments,” and said, “If the domestic stablecoin market begins to take off, Kakao Pay, which is making various preparations at the group level, is likely to attract attention as a leading beneficiary.”

[email protected] Choi Doo-seon Reporter