[Click eStock] "Kakao Expected to Show Strong Q4 Performance"

Shinyoung Securities Issues 'Buy' Investment Opinion and Sets Target Price at 190,000 KRW... Closing Price on the 8th at 159,500 KRW

[Asia Economy Reporter Kum Boryeong] There are expectations that Kakao's performance in the fourth quarter of last year will be favorable.

According to Shin Young Securities on the 9th, Kakao's revenue for the fourth quarter of last year is estimated at 856.8 billion KRW, a 27.2% increase compared to the previous year. Operating profit is expected to record 69 billion KRW, up 16.7% from the previous quarter.

The growth of Talk Biz led to the strong performance. Yoon Euljung, a researcher at Shin Young Securities, explained, "Talk Biz's revenue reached 631.3 billion KRW on an annual basis last year, growing 49.9% compared to the previous year, and it is expected to record 934.3 billion KRW this year, a 48% increase from last year. The contribution of Talk Board's revenue is expected to remain solid this year as well, and with the introduction of new technologies such as AI, advertising effectiveness is expected to be maximized. Besides Talk Board, various monetization models of KakaoTalk messenger, including KakaoTalk Shop (#) tab, Talk Channel, and New Plus Friends, are properly settling in the service and are estimated to start contributing significantly to revenue."

Kakao Pay continues to expand its platform by strengthening connections between financial services. The transaction amount in the fourth quarter of last year is expected to surpass 14 trillion KRW. Researcher Yoon said, "Synergy effects with various financial services such as bill payment service and mobile receipts, as well as linkage effects with commerce platforms, are anticipated. At the end of last year, Kakao Bank secured the position of the largest shareholder, and if it acquires a securities license through the acquisition of Baro Investment & Securities in the future, service expansion to investment product sales will also be possible. With the introduction of open banking, pump banking fees are also expected to decrease, so significant improvement in profitability of Kakao's financial services is expected this year."

Accordingly, Shin Young Securities has given Kakao a 'Buy' investment rating with a target price of 190,000 KRW. The closing price on the 8th was 159,500 KRW.