[Special Stocks] "Growth Stocks Rebound Not Easy"... NAVER·Kakao Fall During Trading

[Asia Economy Reporter Minji Lee] As investor sentiment toward growth stocks has sharply cooled, the decline in NAVER and Kakao is intensifying.

At 10:35 a.m. on the 26th, NAVER was trading at 205,000 KRW, down 2.61% from the previous trading day. At the same time, Kakao recorded a 1.31% drop to 60,200 KRW. During the day, Kakao fell to 60,100 KRW, setting a new intraday low once again.

Securities experts analyzed that despite the steady decline in stock prices this year, it will be difficult to seek a rebound within the year. Although the valuations of global big tech companies have fallen lower than ever before, considering the macro environment, it is hard to expect an upward trend.

Jung Hoyoon, a researcher at Korea Investment & Securities, said that for big tech companies’ stock prices to recover, the profit growth rate must increase. Taking NAVER as an example, since 2014, the operating profit growth rate has shown a high correlation with the stock price, but as the operating profit growth rate declined, NAVER’s stock price entered a downward trend. Researcher Jung explained, “Given the external environment where expectations for new businesses are difficult to be reflected,” it is somewhat difficult to expect a meaningful recovery in the operating profit growth rate.”