[Click eStock] "Kakao, Limited Additional Corporate Value Decline Due to Regulation"

[Asia Economy Reporter Song Hwajeong] Yuanta Securities on the 20th upgraded its investment opinion on Kakao from 'Hold' to 'Buy,' viewing that additional corporate value decline due to regulations will be limited. The target price was maintained at 150,000 KRW.

Researcher Lee Changyoung of Yuanta Securities stated, "Due to recent platform regulation issues, the stock price has fallen excessively, resulting in a gap of more than 10% between the target price and the current price, which allows for an upgrade in investment opinion," adding, "Further corporate value decline caused by regulations is expected to be limited."

Regarding the ban on online financial product brokerage by KakaoPay, which was the cause of the recent sharp stock price drop, the suspended services (P2P investment, insurance product comparison recommendation) accounted for only 1.2% of KakaoPay's total sales in the first half of this year, indicating a limited impact on KakaoPay's growth rate. The researcher explained, "The loan product comparison sales, which have the highest sales proportion (16%), completed registration for loan-type product brokerage on the 24th of last month, enabling continued sales in the future. Additionally, fund product brokerage sales (15%) are conducted by KakaoPay Securities, not KakaoPay itself, and by changing the UI (User Interface) and UX (User Experience) to clarify this, sales are possible, allowing recognition of sales and valuation as a financial platform going forward."

Yuanta Securities forecasts Kakao's Q3 performance this year to show sales of 1.6 trillion KRW, a 47% increase year-on-year, operating profit of 202.9 billion KRW, up 69%, and an operating margin of 12.6%. Researcher Lee analyzed, "Sustained high growth is expected from Kakao Talk Biz and Talk Channel advertising synergy, recovery in growth such as increased commerce gift sales, with Talk Biz growth rate projected at 52% year-on-year. Meanwhile, KakaoPay's expansion of affiliated merchants and loan brokerage, as well as continued increase in 'KakaoT Blue' affiliated taxis, likely maintained high growth in Pay and Mobility sales. On the other hand, marketing expenses for games, entertainment, and webtoons, and sales-linked fees (developer fees, platform fees) due to increased sales of Kakao Games (Odin) also rose."

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