From "Untact" to the Abolition of Public Certificates... Kakao Benefits "Ttokttok"

Stock Price Hits New High at 240,000 Won... Surges Over 80% in Two Months

[Asia Economy Reporter Minwoo Lee] Kakao's stock price is setting new record highs day after day. It is considered the biggest beneficiary of the non-face-to-face (untact) expansion due to the novel coronavirus infection (COVID-19), and it is analyzed that it has received overlapping positive factors as the bill to abolish the public certification system also passed.

According to the Korea Exchange on the 21st, Kakao's stock price reached 240,000 won at 9:25 a.m., setting a new record high. After surpassing 200,000 won for the first time on the 6th, a day before the first quarter earnings announcement, it has continued its upward trend. Compared to 127,500 won on March 19, when the KOSPI fell to the 1400 level for the first time in 11 years, it has risen by 83.9%. With a market capitalization exceeding 20 trillion won, it has settled in the top 10 (excluding preferred stocks). Based on the closing price the previous day, Kakao's market capitalization was 20.1566 trillion won, closely chasing Hyundai Motor's 20.7899 trillion won, which is ranked 9th.

Kakao's stock price began to rise on expectations that it could play a platform role for various online services as the untact era accelerated due to COVID-19. Additionally, it gained further momentum when the National Assembly plenary session on the 20th passed the 'Electronic Signature Act Amendment' focusing on abolishing the public certification system. The amendment abolishes the public certification authority, public certification, and public electronic signature system, granting validity to various electronic signatures. Kakao had already launched the 'KakaoPay Authentication' service in June 2017, which allows easy authentication through the 'national messenger' KakaoTalk without installing a separate program. Since the number of users exceeded 10 million in three years, it is analyzed that Kakao could be a beneficiary of the abolition of the public certification system.

In the first quarter of this year, Kakao recorded sales of 868.4 billion won and operating profit of 88.2 billion won. Compared to the same period last year, sales increased by 23% and operating profit by 219%, achieving the highest quarterly performance ever. Sales related to TalkBoard, which displays advertisements in KakaoTalk chat rooms, increased significantly, and growth in various online content and e-commerce sectors also contributed.

As untact is expected not to be a temporary phenomenon caused by COVID-19 but to fundamentally change lifestyles, there are forecasts that Kakao will continue to grow steadily in the future. The upcoming initial public offerings of Kakao Bank and Kakao Page, representatives of 'TechFin' and 'content platforms,' are also positive factors. Sung Jonghwa, a researcher at Ebest Investment & Securities, said, "As the untact era has been accelerated by COVID-19, untact-related businesses such as KakaoPay, Kakao Bank, Kakao Page (webtoons and other content), and Kakao Commerce are all facing very favorable business environments. The high growth energy will not fade and will continue, and profitability will improve more steeply in the future."

This content was produced with the assistance of AI translation services.