[Click eStock] "Kakao, Growth Expected in All Business Sectors in 2020"

Published 14 Feb.2020 07:24(KST)

[Asia Economy Reporter Minji Lee] IBK Investment & Securities judged on the 14th that Kakao is expected to show steep growth across all business sectors this year.

Kakao recorded Q4 sales of 867.3 billion KRW and operating profit of 79.4 billion KRW, increasing by 28% and 1749% respectively compared to the same period last year. Net loss was 420.1 billion KRW due to an impairment loss on intangible assets amounting to 4,233.3 billion KRW.

Researcher Seunghoon Lee said, “Platform segment sales increased by 46% to 444 billion KRW due to improved performance of Talk Biz,” adding, “Commerce gift transaction volume also grew by 41%, driving Talk Biz sales growth.” In particular, new business sales recorded 88.2 billion KRW, up 94.7% year-on-year. This was due to Kakao Pay’s transaction volume reaching 13.5 trillion KRW per quarter, a 75% increase from the previous year, and online payment transaction volume growing by 82%.

Content segment sales also grew by about 14% during the same period, reaching 423.3 billion KRW. While the game and music sectors showed solid growth, there was an adjustment in annual paid content sales. Researcher Lee said, “Due to accounting standard adjustments for Kakao Japan, annual sales decreased by 54.4 billion KRW,” and added, “The paid content segment and Piccoma segment grew by 61% and 138% respectively, recording the highest quarterly sales.”

Costs increased significantly due to the reflection of performance bonuses, with labor costs rising by 29.6% compared to a year ago to 202.5 billion KRW.

Researcher Lee said, “Kakao’s corporate value will grow further due to advertising revenue growth in Talk Biz and improved new business performance in Techfin and Mobility,” and added, “In Techfin, as Kakao Pay accounts move to securities real-name accounts, remittance fees will be reduced.”