[Click eStock] "Kakao Expands Advertising via Open Chat... Target Price Maintained"

[Asia Economy Reporter Myunghwan Lee] Korea Investment & Securities announced on the 13th that it maintains a buy rating and a target price of 125,000 KRW for Kakao. This is because Kakao's open chat-based advertising expansion business could be a driving force for stock price growth.

On the 8th, Kakao shared its future growth strategy based on expanding its advertising business using open chat at an event held for securities analysts. Open chat is a message-based community service within KakaoTalk that allows anyone to freely create open chat rooms and chat with an unspecified number of people. Unlike regular chats, open chat is based on non-real-name users and involves chats among people with shared interests. While KakaoTalk's monthly active users (MAU) in South Korea are about 47.4 million, the daily active users (DAU) of open chat are around 9 million.

Korea Investment & Securities analyzes that open chat has high potential as an advertising platform. Currently, KakaoTalk's chat room ads are only displayed at the top of the list, but since individuals have multiple chat rooms, there is an expected effect of expanding the advertising space. Additionally, because open chat rooms are based on non-real-name users gathered by shared interests, there is less resistance to ads and targeting is easier. Another advantage is the ability to display various types of ads such as images and videos.

Open chat rooms have various advantages as an advertising space, and if the advertising business is fully launched, it is expected to lead to another increase in revenue. Researcher Hoyoon Jung of Korea Investment & Securities analyzed, "Although it will take time for the business to become active, if it settles, it could be an important change that serves as a trigger for stock price growth."

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