[Market Focus] Advertising Growth and Improved Profitability Expected... Kakao Up 3.09%

Kakao’s stock price is on the rise amid expectations surrounding its improving performance and the commercialization of its B2C (business-to-consumer) AI-powered agent services.

As of 10:15 a.m. on April 14, Kakao was trading at 48,450 won, up 3.09% from the previous trading day.

On this day, Shinhan Investment Corp. maintained its buy rating on Kakao. Regarding Kakao’s first quarter earnings this year, Shinhan forecasted operating revenue of 1.9826 trillion won (up 6.4% year-on-year) and operating profit of 178.5 billion won (up 69.4% year-on-year, with an operating margin of 9%). This is expected to be in line with the operating profit consensus (market average estimate) of 181.5 billion won.

Kang Suk-oh, Senior Researcher at Shinhan Investment Corp., stated, "Talk Biz advertising is expected to grow by more than 15%, driven by both expanded inventory and increased demand," adding, "The mobility business has shown double-digit top-line growth and improved profitability since last year, and is evolving into a subsidiary that contributes to profits alongside Kakao Pay (which posted a net profit margin of 7% last year). The content segment overall experienced an off-season and is currently focused on maintaining profitability rather than expansion."

He explained, "The market for B2C services closely tied to daily life has yet to fully open," and emphasized, "If KakaoTalk can seamlessly integrate services such as food delivery, restaurant reservations, travel, and shopping with the help of AI and a smooth payment process, there is still a high possibility that Kakao can dominate the domestic market." Recent developments have confirmed the participation of companies such as Musinsa, Olive Young, The Hyundai, and MyRealTrip.

However, the target price was lowered by 6.3% from the previous level to 75,000 won. Kang noted, "With the new features introduced to KakaoTalk, Talk Biz-led high growth is continuing. Although the pace of the AI business has been somewhat disappointing and this has led to a short-term decline in the share price, the stock is expected to rebound as major partners join."

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