[Weekly HOT Stocks] Kakao, Stock Price Rises 20% in a Week... TalkBiz Growth Drives Earnings

On the 10th, it surged to 368,000 won, marking a 52-week high record

[Asia Economy Reporter Kum Boryeong] Kakao continued its sharp rise over the week, attracting strong interest from investors.

According to the Korea Exchange on the 11th, Kakao closed at 355,500 KRW the previous day.

Kakao's stock price has maintained a strong upward trend day after day. The stock price, which was 294,000 KRW on the 3rd, rose by 20.92% within a week. On the 10th, it soared to 368,000 KRW, marking a 52-week high. From the 6th to the 10th, it ranked 4th among the top stocks in net purchases by individual investors.

Behind Kakao's popularity lies solid performance. Despite the economic slowdown caused by COVID-19, Kakao is expected to continue its profit growth in the second quarter of this year. According to Kiwoom Securities, Kakao's second-quarter earnings are estimated at 921.9 billion KRW in revenue and 97.4 billion KRW in operating profit. Compared to the previous year, these figures represent increases of 25.8% and 140.8%, respectively.

Kim Hakjun, a researcher at Kiwoom Securities, explained, "In the case of Bizboard, it is believed that the daily sales level of 500 million KRW achieved in December last year was recovered in the second quarter," adding, "The commerce sector, which showed high growth in the first quarter, is also expected to continue its favorable performance in the second quarter, so the growth of TalkBiz is expected to drive the earnings."

Kakao continues to show growth aiming to become a lifestyle platform. In financial services, it is expanding into securities and insurance services, and in the mobility market, it has rapidly increased T Blue taxis, entering full-scale monetization. Recently, it introduced live commerce to TalkDeal to target niche markets. Kakao Kids also entered the online education market by merging with 'Yanadoo.' As Kakao's influence in users' daily lives grows, its corporate value is expected to increase as well.

In the second half of the year, a rally of subsidiary initial public offerings (IPOs) is expected to begin. Starting with Kakao Games, listings of Kakao Page and Kakao Bank are planned. Oh Donghwan, a researcher at Samsung Securities, analyzed, "The listing of subsidiaries reveals the value of Kakao's main businesses to the market and allows the use of listing funds as resources for growth, which is a factor for increasing Kakao's corporate value," adding, "The success of Kakao Games' IPO, which is the first to start, could influence expectations for subsequent IPOs and thus will be an important variable for Kakao's stock price."