[Click eStock] "Kakao, Strong Q4 Performance Expected Last Year"

Ebest Investment & Securities Issues 'Buy' Rating and 500,000 KRW Target Price... Closing Price on 5th at 393,000 KRW

[Asia Economy Reporter Kum Boryeong] Expectations are rising that Kakao will record strong performance in the fourth quarter of last year.

According to Ebest Investment & Securities on the 6th, Kakao's consolidated results for the fourth quarter of last year are estimated at KRW 1.2471 trillion in sales and KRW 143.3 billion in operating profit. This represents a 47.1% increase in sales and an 80% increase in operating profit compared to the previous year.

Seong Jonghwa, a researcher at Ebest Investment & Securities, said, "Portal business continues to struggle due to existing growth stagnation and the impact of COVID-19, but Talk Biz (Biz Board, commerce-centered) and new businesses (Pay, mobility-centered) have shown explosive growth every quarter last year. This momentum is expected to continue in the fourth quarter, more than compensating for the portal business's weakness." He added, "Biz Board is expected to easily achieve its daily sales target of KRW 1 billion in December. Commerce is maintaining a favorable trend across key sectors such as Gift, Talk Store, and Makers, with the fourth quarter benefiting from the peak season effect. Pay is also maintaining a strong trend, and with the peak season effect added in the fourth quarter, the 2020 transaction volume target of KRW 70 trillion is expected to be fully achieved."

Ebest Investment & Securities has given Kakao a 'Buy' rating with a target price of KRW 500,000, up from the previous KRW 460,000. The closing price on the 5th was KRW 393,000. Researcher Seong said, "This year, we expect news of breaking even on an annual operating profit and loss basis for core new businesses such as Pay and mobility. Additionally, IPOs for Pay and Bank are planned." He explained, "Kakao Pay Securities will also launch stock and other product operation services through its Mobile Trading System (MTS), which is likely to be a significant issue. After sufficient and healthy period adjustments, various positive issues and momentum will become even more attractive."

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