[Click eStock] "Kakao, Solid Earnings Growth to Drive Stock Price"

[Asia Economy Reporter Eunmo Koo] NH Investment & Securities analyzed that Kakao is expected to record significant operating profit growth this year, driven by remarkable growth in advertising and commerce sales, along with improved profitability in mobility, webtoon, and fintech sectors.

NH Investment & Securities maintained its investment rating on Kakao as ‘Buy’ and raised the target price from 520,000 KRW to 570,000 KRW. In a report dated the 12th, researcher Jaemin Ahn stated, “Advertising sales centered on Kakao Biz Board and commerce sales from Gift and Talk Store are rapidly growing due to the peak season and the impact of COVID-19, while profitability improvements in new business areas such as mobility, webtoon, and Pay are expected to drive earnings growth.” Operating profit for this year is forecasted at 772.2 billion KRW, a 67.6% increase from the previous year, and the momentum from subsidiary listings is also expected to positively influence the stock price.

Sales in the Talk Biz division are estimated to reach 1.6 trillion KRW this year, a 43.9% increase from last year’s 1.11 trillion KRW. Researcher Ahn commented, “The advertising and commerce businesses, which serve as cash cows, continue to experience high growth, so the Talk Biz division, composed of these businesses, will see sales growth compared to last year. The Talk Biz business has a higher operating profit margin than Kakao’s overall margin, so the growth and increased proportion of these sales will contribute to overall operating profit growth.”

Furthermore, he forecasted, “The new business Kakao Mobility is rapidly increasing sales due to the recent expansion of affiliated taxis, and Kakao Page and Japan’s Piccoma will continue to achieve high transaction volume growth this year through webtoon sales growth and the success of the IP (intellectual property) business.”

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