Operating Margin Keeps Rising
The authors are analysts of Shinhan Investment Corp. They can be reached at hsh0628@shinhan.com and wonyong.sim@shinhan.com, respectively, -- Ed.
Biggest beneficiary of regulatory shift to standardized API
MyData services, which officially kicked off in Korea on 5 January 2022, take a step beyond open banking to allow companies to aggregate personal credit information scattered across different financial institutions and provide the data through a single platform for easier access and improved convenience. Following the official launch of MyData services, conventional methods of financial web scraping by institutions on behalf of individuals is no longer allowed. Now financial data collection is only possible via a highly secure, standardized application programming interface (API).
As the only API platform operator that was granted a MyData business license in 2021, Coocon provides support to companies that seek to expand into MyData services but lack sufficient resources to develop a proprietary API and helps companies without a license to build up their MyData business. Coocon's MyData platforms Plug-In, Open Box, F-Info and All-in-one offer client companies an easy way to offer MyData services to users.
Fee income to drive steep earnings growth through 2022
As the country’s only data hub with real-time, private-line data networks established with all domestic banks, securities firms, and credit card companies, Coocon stands to see steep earnings growth from fee income continue through 2022. Fee income currently accounts for roughly 90% of total sales. The company charges an introductory cost and basic monthly fee for API usage. Depending on the type of contract, additional fees are collected from clients based on service offerings (per search by service users, per business customer, etc.) or in the form of monthly fixed amounts.
2022 outlook: Sales of KRW71.7bn, OP of KRW20.7bn
For full-year 2022, we forecast sales at KRW71.7bn (+16.7% YoY) and operating profit at KRW20.7bn (+23.1% YoY). Financial institutions such as Samsung Card, Woori Card, BNK Kyongnam Bank and KB Savings Bank have already adopted Coocon’s MyData solutions, and companies without a MyData license or the capability to build up an in-house service team are likely to seek a partnership deal with Coocon going forward.
Key investment points for Coocon are: 1) unrivaled leadership in the domestic data API market based on its strong data collection capability; and 2) high operating leverage expected as a company in the software-as-a-service (SaaS) industry. Coocon continues to report sharp improvement in profitability each year with its operating margin rising from 15.1% in 2019 to 21.9% in 2020 to 27.4% in 2021.