[Click eStock] "Kakao, Increased Operating Expenses... Prolonged Adjustment"

"Commerce and Blockchain, NFT, Metaverse Growth Potential Valid This Year"
NH Investment & Securities "Kakao Target Price Lowered from 180,000 KRW to 160,000 KRW"

[Asia Economy Reporter Gong Byung-sun] Since the regulations began last year, Kakao's adjustment period has been prolonged. However, as the performance of key businesses such as advertising, e-commerce (commerce), and content continues to grow, there are forecasts that the corporate value will rise again.

On the 11th, NH Investment & Securities maintained its investment opinion of 'Buy' on Kakao but lowered the target price from 180,000 KRW to 160,000 KRW. The closing price on the previous day was 96,000 KRW.

Starting with the government's platform regulations last year, Kakao's stock price began to adjust. Additionally, issues such as interest rate hikes also occurred. Accordingly, NH Investment & Securities estimated Kakao's Q4 sales last year to be 1.71 trillion KRW, a 39.2% increase compared to the same period last year, and operating profit to be 155.7 billion KRW, a 4% increase over the same period. These figures are 2.66% and 27.62% below the respective market consensus.

Although sales grew, operating expenses are also expected to increase significantly. NH Investment & Securities estimated Kakao's Q4 operating expenses last year to be 1.56 trillion KRW, a 44% increase compared to the same period last year. Jaemin Ahn, a researcher at NH Investment & Securities, explained, "Personnel expenses are expected to rise due to company-wide incentives and increased workforce, and marketing costs will also increase. Additionally, as the fund of Kakao Ventures, which invested in Dunamu, was liquidated, incentives related to the performance will occur significantly."

However, NH Investment & Securities believes that growth potential remains valid. Considering investments and achievements in new businesses, the recent stock price adjustment is excessive. Researcher Ahn said, "This year, we will challenge and seek growth in new businesses such as commerce, blockchain, non-fungible tokens (NFT), and metaverse."

This year, TalkBiz's sales were also favorable at 491.2 billion KRW, a 34.4% increase compared to the same period last year. It is interpreted that the Q4 advertising peak season and the combination of Talk Channel advertising and commerce, which Kakao is focusing on, led to sales growth.

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