Kakao Remains Steady Despite Market Volatility... Surpasses 40 Trillion Won Market Cap

Most Top KOSPI Market Cap Stocks Show Resilient Performance Despite Declines
4Q Earnings Improvement Raises Expectations for This Year

[Asia Economy Reporter Minwoo Lee] Despite extreme volatility in the KOSPI market, Kakao's stock price continues to move steadily.

As of 9:02 AM on the 13th, Kakao's stock price rose 0.98% from the previous day to 462,000 KRW. Based on this price, the market capitalization is 40.868 trillion KRW. This represents an increase of about 6.5% compared to the 8th, a period during which the KOSPI, which had been surging relentlessly, experienced a brief 170-point drop during trading on the 8th, expanding volatility and undergoing a slight correction.

This contrasts with Naver's (NAVER) market capitalization, another leading internet stock, which fell below 50 trillion KRW on the 12th. Not only Naver but also most of the top 10 market cap stocks such as LG Chem (-3.61%), Samsung Biologics (-3.31%), and Hyundai Mobis (-5.82%) closed lower, yet Kakao closed higher with ease.

This solo strength is interpreted as driven by expectations of strong fourth-quarter earnings last year and heightened growth prospects this year, attracting investor sentiment. According to financial information provider FnGuide, the market consensus for Kakao's fourth-quarter earnings last year is revenue of 1.2072 trillion KRW and operating profit of 143.1 billion KRW, representing increases of 42.43% and 79.81% respectively compared to the same period last year. Commerce sales are expected to continue their strong performance, including Bizboard ad revenue displayed in KakaoTalk chat room lists, high growth in gift sales during the year-end peak season, and the entry of luxury miscellaneous goods. New business sales are also expected to approach 170 billion KRW, increasing about 13.0% from the previous quarter due to increased KakaoPay payment amounts and financial transaction volumes.

Steep growth is also expected this year. Although marketing investments and workforce expansions for the growth of Piccoma (webtoon) and KakaoPay will increase costs, it is analyzed that the core business expansion will proceed rapidly as losses from new businesses decrease. KakaoPay has already reached the break-even point (BEP) on a quarterly basis, and losses from new businesses are being reduced to record lows each quarter. In particular, KakaoPay’s launched services such as ‘KakaoTalk Wallet’ and subscription economy services are expected to help improve profitability through expanded payment and identity verification fees.

Accordingly, sales are expected to exceed 5 trillion KRW for the first time ever this year. Ji-won Park, a researcher at Kyobo Securities, said, "As various businesses provide subscription services within the KakaoTalk platform, the ecosystem encompassing ‘commerce-pay-advertising’ within KakaoTalk will expand," adding, "It will achieve the largest profit growth among internet sectors."

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