[Click eStock] "Kakao's Earnings Growth This Year Expected to Be Reflected in Stock Price"

Kakao Pangyo Agit, Seongnam, Gyeonggi. Photo by Jinhyung Kang aymsdream@

On the 16th, SK Securities maintained its 'Buy' rating and target price of 75,000 KRW for Kakao, expecting performance growth this year.

Nam Hyo-ji, a researcher at SK Securities, stated, "This year, Kakao is expected to record 757 billion KRW, a 47.3% increase compared to the previous year on a consolidated basis," adding, "This is a period where expectations for performance growth can be reflected in the stock price."

Researcher Nam analyzed, "This year, the advertising business will continue revenue growth by benefiting from increased sales efficiency of the Friends tab, the launch of local package products attracting small and medium-sized enterprise (SME) advertisers, and the expansion of inventory along with strengthened social networking service (SNS) features in Open Chat and KakaoMap."

The new initiatives are also expected to reduce the scale of losses. Although about 221 billion KRW in operating losses were recorded last year, it is expected to decrease by more than 60 billion KRW compared to the previous year. The entertainment sector is also expected to recover performance through story cost control and IP strengthening. AI has been applied to KakaoTalk with features such as conversation summarization and tone changing, and plans to apply it to various community services within the year.

Researcher Nam added, "Although Kakao experienced poor performance and stock price due to massive operating losses last year, its core business has shown signs of recovery since the second half of the year, and performance has improved through business restructuring of loss-making subsidiaries."

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