All Businesses Boast Solid Growth Potential
The author is an analyst of NH Investment & Securities. She can be reached at jy.lee@nhqv.com. -- Ed.
KoreaCenter is likely to benefit from rising demand for cross-border e-commerce (driven by favorable forex conditions and travel restrictions), as well as the year-end shopping season. An increasing number of online market participants also bodes well for the firm’s earnings moving ahead.
Boasts attractive valuations
We initiate coverage of KoreaCenter with a Buy rating and TP of W12,000. Derived by applying a target P/E of 50x (the multiple for GoDaddy, a firm with relatively low valuations vs its global peers) to 12-month forward NP, our TP possesses upside of 55% versus the Oct 30 share price of W7,720.
KoreaCenter offers a wide range of e-commerce solutions, including shopping mall solutions and global sourcing and data sales services. Against this backdrop, the firm appears well-positioned to benefit from the ongoing expansion of the domestic online market.
All businesses boast solid growth potential
Backed by favorable forex conditions and rising cross-border e-commerce demand (amid travel restrictions), KoreaCenter’s global e-commerce business (Malltail) should enjoy healthy earnings this year. In particular, the division is expected to benefit from strong online shopping demand driven by Black Friday and Guanggun Jie (Singles’ Day) at year-end.
Moving ahead, the domestic e-commerce business (MakeShop) is expected to benefit from an increasing number of online market participants. The division is to provide one-stop solutions encompassing advertising, price comparison, big data, and shopping mall opening services, which should draw in healthy demand from new, relatively smaller-sized firms. Looking at the big-data e-commerce business (Enuri.com), we expect it to enjoy further earnings growth on the back of rising big data demand in line with the ongoing Fourth Industrial Revolution.