Finance App Moneytree Increasing Services
The author is an analyst of NH Investment & Securities. He can be reached at hyundong.lee@nhqv.com. -- Ed.
Galaxia Moneytree launched finance app Moneytree in 2017, and has since diversified its service portfolio, boosting its earnings growth. Having been sluggish in 1H20, the mobile PG business is expected to bounce back in 2H20. Its planned entry into overseas markets should further bolster momentum.
Finance app Moneytree increasing services
Galaxia Moneytree is an e-payment platform provider that offers diverse services including e-payment (eg, mobile and credit card payment and account transfer) and O2O (online-to-offline, mobile gift card, mobile coupon, and prepayment) services.
Square, a US mobile payment company, has seen its share price soar 196% YTD on higher users for its Cash app and business diversification. In 2017, Galaxia Moneytree launched Moneytree, a finance app similar to Cash. Moneytree boasts 3.5mn cumulative downloads and 2mn users. The app allows users to pay for shopping, withdraw and transfer money, exchange gift cards, and pay utility bills. Diversifying its service portfolio to include virtual currency rewards and big data processing, Moneytree should post 2020 sales of W1bn (+335% y-y).
PG business to expand in 2H20; entry into overseas markets likely
In 1H20, sales at the firm’s e-payment business slid 17% y-y on a decline in clients and consumers’ use of government cash handouts during Covid-19. However, the business’s sales are projected to climb 21% y-y to W20.2bn in 2H20. Also, the company is expected to establish a subsidiary next year to conduct mobile coupon and PG businesses in Vietnam and Thailand. The overseas domain is predicted to contribute more thanW30bn pa to the firm’s total sales from 2023.
Galaxia Moneytree’s largest shareholder is Hyosung Group chairman Cho Hyun-jun with a 32.5% stake. In accordance with the Monopoly Regulations and the Fair Trade Act, the chairman will need to dispose of part of his stake in Galaxia Moneytree by yearend. We believe that companies will find Galaxia Moneytree an appealing investment target as it is capable of offering diverse payment platform services. The firm is trading at a 2020E P/E of 25.7x. This valuation premium to other mobile PG providers proves that the firm is an attractive investment vehicle.