[Click eStock] Payco Grows Leveraging Commerce... "Kakao Target Price Approaches 300,000 Won"

High Growth in Commerce with Pay and Securities Synergy
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[Asia Economy Reporter Minwoo Lee] Kakao, whose stock price has already more than doubled since the yearly low in March, is still considered to have growth potential. This is because the expansion of financial services such as KakaoPay and securities is being triggered based on commerce growth, and new businesses are also showing results.

On the 1st, Shinhan Financial Investment maintained a 'Buy' rating on Kakao and raised the target price by 25.5% to 295,000 KRW. Despite recording a new high of 279,500 KRW on May 26, which is 219% of the yearly low of 127,500 KRW (March 19), it is still evaluated to have growth potential.

First, commerce growth is expected to be effective. Researcher Moonjong Lee of Shinhan Financial Investment said, "KakaoTalk Gift started with mobile coupons and now, based on the convenience that the gift recipient only needs to enter the delivery address, the variety of products has expanded and the unit price has continuously increased," adding, "'TokDeal' is also rapidly growing based on social functions that provide discounts and points when two or more people purchase, building an independent commerce ecosystem leveraging the advantages of the messenger." Additionally, with features such as real-time video shopping within the KakaoTalk chat window, the commerce ecosystem is expanding, and synergy with advertising has also strengthened.

Commerce growth is also leading to an increase in KakaoPay payment amounts. The researcher said, "Commerce growth ultimately acts as a catalyst for the expansion of financial services, increasing payment frequency and balance, enabling interest payments and product recommendations through Pay Securities," and "With over 20 million monthly KakaoPay users already, as connections with securities and banks expand, its role as a product sales channel will also grow."

Subsidiary profit improvement is also progressing smoothly. In the first quarter, Kakao's new business operating loss was 22.3 billion KRW, the lowest quarterly level since 2018. Kakao Mobility is expanding its taxi franchise business through KakaoT Blue, currently operating 5,000 vehicles, with plans to increase to 10,000 by the end of the year. The researcher said, "Kakao Page and Piccoma (Japan), which are content sectors such as webtoons, are in a profit leverage phase," adding, "In the second half, with the launch of TokTV, production capabilities and actor intellectual property (IP) power will be confirmed, making a revaluation of Kakao M's value possible."