[Weekly HOT Stocks] Kakao, Foreigners and Institutions 'Interest UP'... Focus on Growth

[Asia Economy Reporter Kum Bo-ryeong] Kakao has captured the attention of foreign and institutional investors over the past week.

According to the Korea Exchange on the 27th, foreign investors purchased 87.9 billion KRW worth of Kakao shares between the 21st and 24th. Combining the KOSPI and KOSDAQ markets, Kakao was the top stock in net purchases by foreign investors. Institutional investors also bought 39 billion KRW worth of Kakao shares during the same period.

Kakao's top-line growth is drawing attention. Hyundai Motor Securities estimated Kakao's consolidated revenue for Q4 at 1.24 trillion KRW, representing a 46.1% increase year-over-year and a 12.5% increase quarter-over-quarter. Hyundai Motor Securities analyst Kim Hyun-yong stated, "The top-line growth rate is expected to surpass the previous quarter, which marked a peak. Both Biz Board and Commerce within Talk Biz are maintaining high growth rates at the previous quarter's level, enabling over 50% revenue growth following Q3. Talk Biz benefits from expanded ad space to #Tabs and the concentrated execution of deferred annual marketing budgets by advertisers due to COVID-19 in Q4, while Commerce's growth is driven by an increased proportion of delivery products in Gift and strong performance in Talk Deal," he explained.

Kakao is expected to strengthen new consumer utility businesses such as finance, mobility, and subscription economy next year. Analyst Kim said, "Next year's top-line growth is expected to be contributed in order by new businesses, paid content, and Talk Biz. The strategy will focus on generating significant annual operating profits in Pay and Mobility and developing the early-stage subscription economy business model. It is anticipated to be a foundational year achieving both scale expansion and profitability in new consumer utility businesses," he added.

Explosive scale growth is also anticipated. Talk Board, which aimed to secure 10,000 advertisers by year-end, exceeded 12,000 advertisers as of Q3. DS Investment & Securities analyst Choi Jae-ho said, "Based on the trend, Talk Board will easily secure over 30,000 advertisers by the end of next year. Daily sales of Talk Board are expected to reach 1 billion KRW by the end of this year and exceed 1.5 billion KRW by the end of next year. Pay, Bank, and Mobility are projected to record overwhelming sales growth rates exceeding 70% next year," he analyzed.

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