[Click eStock] "Kakao to Maintain High Growth in Q2 and Second Half"

[Asia Economy Reporter Song Hwajeong] Yuanta Securities maintained a 'Buy' rating and a target price of 135,000 KRW for Kakao on the 7th, expecting high growth to continue in the second quarter and the second half of the year.

Kakao achieved strong performance in the first quarter, surpassing market expectations. First-quarter sales reached 1.258 trillion KRW, a 45% increase compared to the same period last year, and operating profit rose 79% to 157.5 billion KRW. Net income attributable to controlling interests increased 190% to 224.5 billion KRW. Notably, non-operating income contributed to this growth, with equity-method income of 135.1 billion KRW recorded from Dunamu (including indirect stakes in Kakao totaling 22.4%) and Kakao Bank (31.8%), boosting net income attributable to controlling interests.

High growth is expected to continue in the second quarter and the second half. Researcher Lee Chang-young of Yuanta Securities stated, "In the second quarter, the advertising peak season effect will resume growth in Talk Biz Board sales, which had declined compared to the previous quarter," adding, "Sustained high growth in commerce, mobility, Pay, Piccoma, and IP business will continue in the second quarter and the second half." The overall operating profit margin is also expected to steadily improve due to profitability improvements in subsidiaries such as mobility and Pay.

It is believed that a high-growth model has been structured. Lee explained, "The high growth of commerce sales based on 'Kakao Gift,' and the high growth of mobility services such as the platform taxi 'Kakao T Blue' are leading to the high growth of Kakao Pay," adding, "The increase in customers through advertisers' AlimTalk and Talk Channel leads to growth in Talk advertising and commerce sales, forming a structured growth ecosystem." Furthermore, if Kakao Page and Piccoma's story IPs lead to video business sales for Kakao Entertainment and expand into overseas markets, this is expected to become another pillar of structured growth.

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