ITCEN Global, which was previously known as an IT service company, is recently expanding its new business based on Web 3 (blockchain-based digital assets). This year, its stock price has surged by about 475%, and it recorded an earnings surprise in the first quarter. In the industry, expectations for improved performance are increasing in line with the digital asset nurturing policy of the Lee Jae-myung government.
According to the Korea Exchange on the 20th, ITCEN Global's stock closed at 30,000 won on the previous day. The company's stock price was 5,210 won earlier this year, marking a staggering increase of 475.8% in just six months. Revenues also exceeded market expectations. ITCEN Global's first quarter sales reached 1.6366 trillion won, and operating profit was 33.8 billion won, both figures showing increases of 80% and 772% year-on-year, respectively, representing the highest performance for a quarter.
Performance improvement was led by ITCEN Global's Web 3-centric business, the gold trading platform. ITCEN Global operates gold trading platforms such as 'SenGold' and 'Geumbang Geumbang' through its subsidiary, the Korea Gold Exchange. 'SenGold' is a digital gold piece investment platform, while 'Geumbang Geumbang' serves as a gold direct transaction brokerage platform. As gold prices soared this year, the increase in transaction volume has improved platform revenues. According to the Korea Exchange, gold transaction volume in the first quarter this year was 9.3 tons, an increase of about 30% compared to the same period last year (7.2 tons). The transaction amount for 'Geumbang Geumbang' in the first quarter also increased by 135% compared to the previous quarter and by 202% year-on-year.
ITCEN Global is expanding its business into digital assets such as token securities (STO) and real-world assets (RWA). In 2022, it established the digital asset company 'Credder' in collaboration with the blockchain technology firm BPMG, focusing on the only gold-based digital asset service in Korea. Credder has launched the gold-based RWA platform 'GoldStation' and issued the stablecoin 'GPC' linked to 'SenGold.' In particular, expectations for regulatory easing on stablecoins have increased since the inauguration of President Lee Jae-myung, benefiting the company.
ITCEN Global secured a digital asset distribution platform through the Busan Digital Asset Exchange (BDAN·Bidan). The company became the second-largest shareholder by acquiring a 20% stake in Bidan for 2 billion won last year. Meanwhile, ITCEN Global transferred 100% of its stake in 'SenGold' to Bidan on the 18th. This will allow the company to focus on Web 3 businesses considering stablecoins by leveraging Bidan's global network. To facilitate this, it changed its name from ITCEN to ITCEN Global at the shareholders meeting in the first quarter.
Lim Sang-guk, a researcher at KB Securities, noted, "ITCEN Global is a company equipped with growth engines connecting artificial intelligence (AI) cloud, gold trading platforms, and the digital asset ecosystem," and he evaluated that "the strong performance of the Korea Gold Exchange and the new businesses of its subsidiaries provide attractive mid- to long-term growth opportunities."
ITCEN Global was not a Web 3 specialized company from the beginning. The company focused on selling and servicing external IT solutions in its early establishment, with public institutions, educational institutions, government departments, and financial institutions as its customer base. Through this, it surpassed 100 billion won in sales within five years of its establishment. The company later focused on acquiring IT system design and analysis technologies and engaged in mergers and acquisitions (M&A) of related companies. It acquired BTC Information and Communication in 2012, Goodcen and SECUCEN in 2015, SNTC in 2016, Comtec Systems in 2018, and Ssangyong Information & Communication in 2020. The currently acquired subsidiaries changed their names to ITCEN Core, ITCEN PNS, and ITCEN NTEK.
The acquisition of the Korea Gold Exchange played a crucial role in expanding into non-IT sectors. ITCEN Global acquired a 67.3% stake in the Korea Gold Exchange for 76 billion won in 2018. The Korea Gold Exchange now serves as a core revenue channel for ITCEN Global. Last year, the provisional sales of the Korea Gold Exchange were 3.9 trillion won, accounting for about 80% of ITCEN Global's total sales (4.961 trillion won).
However, it is noted that the fact that ITCEN Global has expanded its business base through acquisitions rather than developing technology directly is a limitation. In reality, in 2020, ITCEN's consolidated revenue was 2.2751 trillion won, reflecting over a 40% growth compared to the previous year (1.5300 trillion won), which the industry evaluates as the effect of the acquisition of Ssangyong Information & Communication.
ITCEN Global's operating profit margin last year was 1.18%, which is considered low. The industry attributes this to increased expenses due to successive M&As and the low fee rate relative to sales, attributable to the nature of the gold trading exchange centered on physical gold transactions.
The company stated that it will diversify its business portfolio in line with the changing IT environment to enhance corporate value. An ITCEN Global official mentioned, "While it started as an IT service company, a major restructuring of the business has been underway for several years," adding, "The existing IT services have been transferred to subsidiaries, and ITCEN Global is focusing on Web 3 business and fostering startups."