Record-Breaking Performance in IT and Game Industries, Fighting for Stock Price Boost

[Asia Economy Reporter Kang Nahum] The domestic IT and gaming industries have taken out the card of share repurchase and cancellation to defend against the relentlessly falling stock prices. Having achieved record-breaking performance this year, they plan to boost stock prices through an active shareholder return policy.

According to related industries on the 12th, Kakao, which recorded its highest-ever performance with sales of over 6 trillion won last year, decided to implement a mid- to long-term shareholder return policy for the first time this year.

Kakao will use 15-30% of its free cash flow based on separate financial statements over the next three years for shareholder returns, of which 5% will be used for cash dividends and 10-25% for share repurchase and cancellation. They plan to maintain a minimum basic dividend per share while providing additional dividends according to company growth. The cash dividend was set at 53 won per share.

In particular, this year, after approval at the shareholders' meeting, Kakao will carry out a total of 300 billion won worth of share cancellations, combining regular and special share cancellations.

This move by Kakao comes as the stock price shows no signs of rebound due to ongoing controversies such as the management of affiliates' executives' shareholding sell-offs and neighborhood market infringement. Kakao's stock price, which once soared to the 170,000 won range in June last year, has repeatedly fallen and now remains in the 90,000 won range.

The management is also putting their lives on the line to boost the stock price. Namgoong Hoon, the appointed CEO of Kakao, declared that he would only receive the minimum wage until the stock price reaches 150,000 won, and the executives of affiliate Kakao Pay said they would use all profits from exercising stock options for share repurchases. Shin Won-geun, the appointed CEO of Kakao Pay, also stated that he would not sell his shares during his term.

Naver, which also recorded a record-breaking performance with annual sales of 6.8176 trillion won last year, has decided to engage in share repurchase and cancellation. Based on 162.1 billion won in resources, Naver plans to pay a dividend of 501 won per common share, totaling 73.8 billion won. The remaining 87.3 billion won will be used to acquire treasury stock within this year and then canceled.

Naver emphasized that it will strive to establish excellent governance as a top priority to enhance corporate value. It explained that it will pursue fundamental changes such as management innovation while resolving controversies surrounding the work environment and organizational culture last year. They believe these efforts can contribute to raising shareholder value as well.

Krafton also announced a share repurchase plan to recover its halved stock price. Krafton's stock price was 259,000 won as of the closing price on the 11th. It has fallen more than 50% compared to last year's peak (567,000 won).

Jang Byung-gyu, chairman of Krafton, said at the earnings conference call held on the 10th, "We judged that Krafton's stock price was undervalued and plan to purchase a certain portion of Krafton shares from today onward."

He added, "The global macroeconomic trends have greatly influenced the stock market, and Krafton, which was recently listed, was also significantly affected. Nevertheless, considering the attempts and business expansions we are preparing, we are confident in our growth potential."

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