[Click eStock] 'Blackout Incident' Kakao, Limited Impact on Earnings but... "Concerns Over Highlighted Regulatory Risks"

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[Asia Economy Reporter Lee Myunghwan] Securities analysts have concluded that the unprecedented outage caused by the server fire will have a limited impact on Kakao's earnings. However, they also noted that the potential emphasis on platform regulations could pose a burden.

On the 19th, Korea Investment & Securities stated, "The negative impact of this fire on earnings or fundamentals is expected to be limited," maintaining their 'Buy' rating and target price of 80,000 KRW for Kakao.

Korea Investment & Securities analyzed that the impact of this incident on Kakao's earnings is limited. Although services such as Gift, Mobility, and Advertising were unavailable for about 10 hours, negatively affecting sales from Talk Biz and other platforms, the absolute scale of the impact is minimal. Compensation for service interruptions will primarily focus on paid services like Melon, Mobility, and Webtoon, with the compensation amount to be determined by a compensation committee.

They also pointed out that the competitive landscape of the messenger market is unlikely to change significantly. Since connectivity among a large number of users is key for messengers, KakaoTalk, used by the vast majority of the population, is expected to retain its position as the leading messenger.

However, Korea Investment & Securities noted that the risks or side effects arising from the monopolistic tendencies of platform operators, highlighted by the Kakao service outage, could be a concern. President Yoon Suk-yeol also mentioned platform monopolies, suggesting that the stance on self-regulation might change. If regulations on platforms are strengthened again, it could become a burden on valuation and investor sentiment.

Jung Hoyoon, a researcher at Korea Investment & Securities, said, "(This incident) has a limited impact on earnings, and there is no expectation of weakening Kakao's core service competitiveness or market share decline due to the fire, so there is no need for major concern," but added, "It is necessary to be somewhat cautious as government-level regulatory risks may newly emerge."

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