[Click eStock] "Kakao, Webtoon Subsidiary Continuing Stable Growth... Target Price Up"

[Asia Economy Reporter Eunmo Koo] Mirae Asset Daewoo has raised its target price for Kakao from the previous 280,000 KRW to 370,000 KRW, stating that Kakao's webtoon-related subsidiaries, Kakao Page and Kakao Japan, are continuing stable growth.

On the 3rd, Mirae Asset Daewoo estimated that nearly half of this year's annual Piccoma transaction amount forecast of 214 billion KRW, about 106 billion KRW, was recorded in the second quarter alone. They reported that Kakao Japan's webtoon service 'Piccoma,' led by original Korean webtoons, achieved significant external growth in the second quarter. Researcher Changkwon Kim of Mirae Asset Daewoo explained in the report, "The Piccoma app's monthly downloads in June increased by 153% year-on-year, raising expectations for future performance, and since June, it has been competing for the top sales rank in the Japanese mobile app book category with Line Manga." Piccoma's transaction amount in June is estimated to have increased by 242% year-on-year, the second quarter transaction amount by 213% year-on-year, and 76% compared to the previous quarter. A characteristic of Piccoma's content is that 9 out of the top 10 titles are works by Korean authors, and among them, 8 are based on original novels.

Naver's Line Manga also announced that it will officially launch a creative webtoon service similar to Piccoma in Japan. Currently, Line Manga is a digital platform that allows users to read existing single-volume books on smartphones. Researcher Kim predicted, "In the long term, content competition between the two companies will be a catalyst for rapid growth in the Japanese market, where users have a high rate of paid usage and average spending, and a deep understanding and affection for comics and animation."

Second-quarter earnings are expected to exceed market expectations. Researcher Kim said, "Second-quarter sales and operating profit are expected to record 919 billion KRW and 100 billion KRW, respectively, up 25.3% and 147.5% year-on-year, slightly surpassing the market consensus operating profit of 95 billion KRW." He added, "With the rapid increase in the non-face-to-face market, growth in traditional business models such as advertising and e-commerce, and the rapid market expansion of new revenue models such as Pay, Bank, Mobility, and Webtoon will be confirmed in the second-quarter results."

The investment opinion was maintained as 'Buy,' and the target price was raised to 370,000 KRW. Researcher Kim explained, "Kakao's webtoon-related subsidiaries are Kakao Page (63.5%) and Kakao Japan (operating Piccoma, with Kakao holding 79.5% and Kakao Page 19.9%). If stable growth in the Korean market, additional expansion and market share acquisition in the Japanese market, and entry into other global countries become visible, there is potential for the combined value of Kakao Page and Kakao Japan to reach the 10 trillion KRW level."

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