[Click eStock] "Kakao, Strong Performance Expected Thanks to TalkBiz"

Hana Financial Investment Issues 'Buy' Rating and 200,000 KRW Target Price... Closing Price 165,000 KRW on 21st

[Asia Economy Reporter Geum Bo-ryeong] Kakao is expected to show strong performance thanks to the success of 'KakaoTalk Biz Board.'

According to Hana Financial Investment on the 22nd, Kakao's Q4 earnings are forecasted to record sales of 869.2 billion KRW and an operating profit of 70 billion KRW. These figures represent increases of 29% and 1531% respectively compared to the previous year.

In particular, the revenue effect from Talk Biz was notable. Due to the year-end peak season effect, advertising and commerce sales increased, and with Talk Board sales, the Talk Biz segment's revenue is expected to lead total sales by recording 199.5 billion KRW, up 56% year-on-year and 23% quarter-on-quarter.

Hwang Seung-taek, a researcher at Hana Financial Investment, explained, "Despite increased labor costs due to performance bonuses and higher year-end marketing expenses, operating profit is expected to reach an all-time high thanks to aggressive sales growth. While the solid Q4 performance is good, the more positive aspect is that strong performance improvements are expected to continue."

This year, various momentum factors are anticipated for Kakao. These include increased Talk Board sales, steady growth of services beyond advertising, and margin improvement due to reduced remittance fee burdens from the establishment of a joint payment network. Researcher Hwang said, "Expansion of new services such as KakaoPay and Kakao Mobility and securing profitability, as well as listing issues of subsidiaries like KakaoPage and KakaoBank, are expected to drive fundamental improvements and enhance investor sentiment."

Hana Financial Investment has given Kakao a 'Buy' rating with a target price of 200,000 KRW. The closing price on the 21st was 165,000 KRW.