[Featured Stocks] Kakao Group Shares 'Plummet'... Simultaneously Hit 52-Week Lows

[Asia Economy Reporter Kwon Jae-hee] Kakao and other Kakao Group stocks simultaneously hit 52-week lows on the 13th. Despite announcements of share buybacks and other stock price support measures, these efforts seem to have had no effect.

As of 10:31 a.m. on the 13th in the KOSPI market, Kakao was trading at 47,750 KRW, down 4.21% from the previous trading day. At the same time, KakaoBank was down 6.48% at 16,600 KRW, while KakaoPay and KakaoGames were down 4.56% and 6.47%, trading at 34,550 KRW and 34,700 KRW respectively.

All four stocks hit intraday 52-week lows. Kakao at 47,300 KRW, KakaoBank at 16,500 KRW, KakaoPay at 33,950 KRW, and KakaoGames at 34,500 KRW.

Global interest rate hikes and recession concerns are unfavorable for growth stocks, and the bleak earnings outlook appears to have dragged down Kakao’s stock price.

In the securities industry, Kakao’s third-quarter earnings are expected to fall short of market forecasts, with profitability recovery anticipated only in 2023.

Daol Investment & Securities lowered Kakao’s target price from 100,000 KRW to 63,000 KRW.

Kim Jin-woo, a researcher at Daol Investment & Securities, stated, "The discount event on Kakao’s subsidiary equity value continues. We raised the discount rate on the equity value of currently listed subsidiaries from 30% to 50%, lowering the target price by 37% from 100,000 KRW to 63,000 KRW."

Kim So-hye, a researcher at Hanwha Investment & Securities, also adjusted Kakao’s target price down to 85,000 KRW, reflecting the decline in global peer valuations and the drop in equity value of affiliated subsidiaries. Kim said, "Regardless of the recession and macro environment, a confirmed signal of profit rebound is a prerequisite for a recovery."

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