[Click eStock] Kakao, Will It Improve in the Second Half of This Year?

[Asia Economy Reporter Hwang Junho] DB Financial Investment lowered the target price of Kakao to 110,000 KRW, projecting that while there are growth factors remaining for Kakao in the second half of this year, it will fall short of market expectations.

DB Financial Investment forecasts Kakao's revenue for the first quarter of this year to be 1.83 trillion KRW, with an operating profit of 169.4 billion KRW. This slightly underperforms market expectations.

TalkBiz is expected to see growth rates below expectations due to a slowdown in advertising growth and seasonality in commerce. In particular, profitability is expected to decline compared to the previous year due to high labor costs, outsourcing/infrastructure expenses, and increased amortization costs in the second quarter caused by higher marketing expenses for games and stories, as well as office relocation.

Hwang Hyunjoon, a researcher at DB Financial Investment, stated, "The target price was lowered to 110,000 KRW by applying a multiple of PSR 6.6 times to this year's expected revenue (a 25% discount from the peer growth phase average of 9 times)." However, he explained, "Considering that growth centered on the content sector in the second half of this year is valid and that the stock price may rise accordingly, the investment opinion is maintained as 'Buy'."

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