[Click eStock] "Kakao, Stair-Step Earnings Improvement Expected to Continue New Business Momentum"

Daishin Securities Issues 'Buy' Investment Opinion and Sets Target Price at 230,000 Won... Closing Price on 21st at 189,500 Won

[Asia Economy Reporter Kum Boryeong] An analysis has emerged that Kakao's stepped-up earnings improvement is expected to continue with momentum from new businesses.

According to Daishin Securities on the 24th, Kakao's business value is estimated at 13.4 trillion KRW, including Talk Biz at 9.4 trillion KRW, Portal Biz at 1.4 trillion KRW, and Music at 1.5 trillion KRW. The value of subsidiary shares was analyzed by multiplying the shareholding ratio by Mobility at 1.3 trillion KRW, Pay at 3.5 trillion KRW, Bank at 3.3 trillion KRW, and Page at 2.4 trillion KRW, totaling about 6 trillion KRW.

Thanks to increased Talk Board sales and improved Pay performance, quarterly operating profit is expected to increase stepwise this year. There is also stock price momentum from the expansion of Pay's financial services and the concretization of listing plans for Page and Bank.

Lee Mina, a researcher at Daishin Securities, said, "After completing the acquisition of Kakao Pay Securities, pre-registration for upgrading Kakao Pay Money accounts to securities accounts is underway. Although short-term marketing expenses may increase depending on the number of pre-registrants and the deposit size per person, attention should be paid to the fact that the recharge and usage limits (currently 2 million KRW per month) of Kakao Pay Money will be removed upon upgrading to a securities account. Since user benefits are also provided, the recharge amount is expected to increase significantly, and based on this, the expansion of financial services such as fund product sales will become possible in earnest." She added, "High-value payments and high-value remittances are also expected to increase. In particular, when payments are made with recharge funds (deposits), Kakao Pay can generate profits as it receives simple payment fees from merchants without incurring costs."

She continued, "Furthermore, with the reduction of remittance fees due to the implementation of open banking and commission income from financial product sales, Kakao Pay's performance is expected to improve rapidly."

Daishin Securities gave Kakao a 'Buy' investment rating with a target price of 230,000 KRW. The closing price on the 21st was 189,500 KRW.