'Kakao·Naver' Keep Rising... Consecutively Breaking Record Highs

Kakao Surpasses 400,000 Won for the First Time Since Listing

Kakao Friends (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] Kakao and Naver (NAVER), regarded as representatives of non-face-to-face (untact) services, have both continued their upward trend for five consecutive trading days, reaching new 52-week highs.

According to the Korea Exchange on the 27th, as of 10:25 a.m., Kakao's stock price rose 4.46% (17,500 KRW) from the previous close to 409,500 KRW. This is the first time Kakao's stock price has surpassed 400,000 KRW since its listing. During the trading session, Kakao's price surged to as high as 412,500 KRW, breaking the 52-week high again following the previous day. At the same time, Naver's stock price also rose 2.69% (9,000 KRW) from the previous trading day to 343,000 KRW. Naver also set a new 52-week high by rising to 347,000 KRW during the session.

Kakao and Naver have shown an upward trend for five consecutive trading days. Considering Kakao's stock price was 364,500 KRW on the 20th, it has risen 13.17% based on the new high on this day. During the same period, Naver also jumped 13.58% from 305,500 KRW.

Kakao and Naver are stocks benefiting from the increased demand for digitalization following the outbreak of the novel coronavirus infection (COVID-19). As COVID-19 resurges domestically, their stock prices are also showing strength.

These two are sometimes grouped as a new low-volatility (low-ball) category. Lee Jungbin, a researcher at IBK Investment & Securities, explained, "Since the end of March, due to a paradigm shift, it has been observed that when the number of confirmed cases increases, capital flows move toward untact services," adding, "We present a new low-ball category that includes communication services such as Kakao and Naver." Low-ball is one of the strategies that can provide excess returns when the market undergoes corrections.

Additionally, for Kakao, the upcoming listing of Kakao Games, a major IPO in the second half of the year, on the KOSDAQ market scheduled for the 11th of next month, is also analyzed as a positive factor for stock price growth. Kakao holds a 58.9% stake in Kakao Games. Kakao Games is conducting a demand forecast for institutions to finalize the public offering price until this day.

The securities industry's view on Kakao's stock price rise is favorable. Jung Hoyoon, a researcher at Korea Investment & Securities, explained, "Most of the new businesses have moved beyond just increasing users to entering a stage where revenue is generated," adding, "Although there may be concerns about the stock price rising throughout the first half of the year, it is still advisable to maintain a positive outlook at this point, where the direction of performance improvement and business growth is clear."

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