Innovative growth
The author is an analyst for Shinhan Securities. He can be reached at byeongsu.kim@shinhan.com -- Ed.
Leading IT service provider for the finance industry
ITeyes is an IT service provider founded in 2012, which saw its business grow along with rising demand for building workflow management systems from domestic banks and securities firms. The company offers various IT solutions leveraging on its strengths in data management and utilization, and boasts a track record in developing systems used in market prediction, loan review, and accounting management, based on key technologies like AI and big data.
The company is poised to make forays into a wide range of industries beyond finance with its in-house developed cloud platform GURMWI. As of 1Q23, finance core accounts for 33% of total sales, AI/big data 18%, digital platform 36%, and merchandise and cloud 13%.
Client base to expand from finance to other sectors
GURMWI is expected to allow ITeyes to expand its clientele to various sectors including healthcare, agriculture, and energy. The company’s proprietary digital platform is optimized for data collection, analysis, and management. We believe GURMWI has strong potential for business expansion as it can develop customized solutions for specific industries with related data input.
The most notable business expansion will be the one into the healthcare industry. Since 2021, ITeyes has been working on standardizing healthcare data code as part of the government-led project for launching MyData service for healthcare. Going forward, it will be able to charge other companies for using APIs, as well as penetrate into the B2C business. We expect the company to see full-fledged growth once the market begins to flourish following the easing of regulations on sharing of healthcare data.
Earnings to turn around in 2023
For 2023, we forecast sales at KRW70.8bn (+29.7% YoY) and operating profit at KRW0.5bn (positive swing YoY). A slew of orders secured in 1Q23 drove up order backlog to KRW60.3bn, an increase of 84.4% YoY. Stronger order intake vs. the fixed cost burden is likely to lead to sales growth. Full-year earnings are projected to swing to positive territory in 2023.
ITeyes is also making new business forays into next-generation industries, such as remote healthcare, energy trading, smart farming, and security token offering (STO). We expect the company to record steady sales growth each year with new businesses in the making.