[Click eStock] Kakao, Will Service Revamp Be Delayed Due to Fire?

On the 20th, as Kakao entered an emergency management system following a data center fire disruption and the resignation of CEO Namgung Hoon, employees were arriving at the lobby of Kakao Agit in Seongnam, Gyeonggi Province. Photo by Kang Jin-hyung, Seongnam aymsdream@

[Asia Economy Reporter Hwang Junho] Kyobo Securities lowered Kakao's target stock price to 87,000 won on the 21st.

First, Kakao's operating profit for the third quarter of this year is expected to record 172.4 billion won, falling short of expectations (-6.3%). Although personnel recruitment is limited this year, labor costs are expected to increase by 40.8% due to the increase in employees following last year's acquisition of subsidiaries. Revenue-linked expenses are also projected to account for about 37.3% of sales due to the increased proportion of content sales.

Dongwoo Kim, a researcher at Kyobo Securities, stated, "The value of listed subsidiaries' equity and the sharp decline in global big tech stock prices, along with delays in commerce restructuring, led to raising the discount rate for Coupang EV/GMV to 50%, resulting in a lowered target stock price."

He added, "It is necessary to verify whether the service restructuring is delayed during the follow-up process such as compensation for damages caused by this month's data center fire and system stability enhancement, or whether changes in mobility traffic share affect growth potential."

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