[Weekly HOT Stocks] Foreign Investors' Sentiment Shifts to 'Kakao'... Strong Performance Expected in Q3

Hi Investment & Securities Estimates Kakao's Q3 Revenue at 1.0597 Trillion KRW and Operating Profit at 131.5 Billion KRW

[Asia Economy Reporter Kum Boryeong] Foreign investors have shown interest in Kakao over the past week.

According to the Korea Exchange on the 11th, Kakao ranked third among the top stocks by net purchases from foreign investors from the 5th to the 8th. During this period, foreign investors net purchased Kakao shares worth 161.5 billion KRW.

Regarding Kakao's third-quarter earnings, Hi Investment & Securities estimated sales of 1.0597 trillion KRW and operating profit of 131.5 billion KRW. Sales are expected to increase by 35.3% year-on-year and 11.2% quarter-on-quarter, while operating profit is projected to rise by 122.5% year-on-year and 34.5% quarter-on-quarter.

Kim Minjung, a researcher at Hi Investment & Securities, stated, "The daily sales of Talkboard ads, a growth driver, are expected to continue increasing in the third quarter. Talkboard, which had an inventory utilization rate of about 30% last quarter, is seeing a continuous rise in usage rates due to an increase in advertisers, and the number of advertisers, initially expected to reach 10,000 by the end of this year, was already achieved in the third quarter." She added, "Along with the increase in non-face-to-face (untact) consumption, commerce transaction amounts such as gift sending and Talk Store are steadily growing. The commerce business is seeing simultaneous increases in sales unit price through an expansion of product categories as well as the number of users. Due to the strong performance of Talkboard and commerce businesses, Talk Biz sales are estimated to increase by 72.8% compared to the same period last year."

Sales from new businesses, including Kakao Pay and mobility, continue to experience high growth. In particular, Kakao Pay's core competitiveness is analyzed to be its leadership in financial technology. Kim Donghee, a researcher at Meritz Securities, explained, "Kakao Pay is convenient for identity verification through biometric technology (facial recognition). It also operates a next-generation credit scoring model and a risk management system that allows thin filers to access financial products using not only basic financial information but also non-financial data. Additionally, a machine learning system automatically detects error situations." The transaction volume this year is expected to reach around 70 trillion KRW.

There are also opinions that upcoming initial public offerings (IPOs) and profit growth will drive the stock price. Kakao plans to list subsidiaries such as Kakao Bank, Kakao Page, Kakao Commerce, and Kakao Japan following the listing of Kakao Games. Oh Donghwan, a researcher at Samsung Securities, said, "Considering the structural growth potential of new businesses and liquidity in the public offering market, the likelihood of successful IPOs for subsidiaries is very high, which is expected to lead to an increase in Kakao's corporate value." He added, "Therefore, as long as the structural profit growth of the entire Kakao ecosystem continues, the weekly upward trend is also expected to persist."

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