[Featured Stocks] Kakao Group Shares Plunge Again Today... Simultaneously Hit 52-Week Lows

[Asia Economy Reporter Lee Seon-ae] Kakao Group stocks, which have been plummeting day by day, continue to show a sluggish trend, with all of them hitting new 52-week lows from the beginning of trading on the 12th.

As of 9:37 a.m. on that day, Kakao was trading at 49,100 won, down 2% from the previous day. Kakao, which barely held the 50,000 won level by closing at 50,100 won the day before, started trading at 49,850 won from the opening price and fell below 50,000 won. It dropped to as low as 49,050 won in the early session. At the same time, KakaoBank recorded 17,100 won, down 3.65%. KakaoBank also hit a new 52-week low again during the session, falling to 17,050 won.

Kakao Games is also trading at 36,750 won, down 3.80% from the previous day, and it hit a new 52-week low of 36,650 won shortly after the market opened. Kakao Pay is also showing a 1.1% decline.

Kakao Group stocks, which are growth stocks, have not been able to avoid stock price declines due to the U.S. Federal Reserve's interest rate hikes. Since growth stocks reflect future cash flows in their stock prices, interest rate hikes act as a negative factor for growth stocks. In this situation, fundamental questions about corporate value have recently arisen. There is even analysis suggesting that the stock prices have been overvalued so far.

Kim Jae-woo, a researcher at Samsung Securities, pointed out, "The reason why Kakao financial units such as KakaoBank and Pay have been given higher valuations compared to competitors from the early stages to now was due to expectations of growth and platform, but failing to meet these market expectations has rapidly eroded the initially granted high valuation premium."

Individual investors' complaints about the erosion of corporate value are also rising. Over the past two years, Kakao has successively listed its subsidiaries: Kakao Games in September 2020, KakaoBank in August 2021, and Kakao Pay in November 2021. Since then, the stock prices of both the parent company Kakao and its affiliates have plummeted, increasing the losses of individual investors. Accordingly, Kakao is not free from the view that it benefits only major shareholders by physically splitting off successful businesses. In this situation, Lionheart Studio, a game company under Kakao Games, is preparing for another listing, intensifying the controversy over double counting (overlapping calculation of corporate value).

Recently, the continuous downward revision of target prices for Kakao Group stocks in the securities industry has also acted as a negative factor. Earlier, Hyundai Motor Securities lowered Kakao's target price from 104,000 won to 90,000 won, and DB Financial Investment lowered KakaoBank's target price to 16,200 won. This is the first time KakaoBank's target price has dropped to the 10,000 won level since its listing.

Samsung Securities lowered KakaoBank's target price from 37,000 won to 15,000 won and Kakao Pay's target price from 56,000 won to 30,000 won on the same day. These levels are below the current stock prices, effectively constituting a sell recommendation.

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