Data-Related Stocks Gaining Attention Following Passage of 'Kakao Outage Prevention' Measure

Kim Beom-su, Head of Kakao Future Initiative Center, attended the comprehensive audit of the Ministry of Science and ICT and related audit target organizations held at the National Assembly on the 24th, and apologized for the Kakao outage. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Kwon Jae-hee] Data-related stocks, which once drew attention due to the Kakao outage incident, soared after the passage of the 'Kakao Outage Prevention Act.' This came as the National Assembly's Science, Technology, Information and Broadcasting Committee approved an amendment to the Framework Act on Telecommunications Development, focusing on data center redundancy. As a result, data-related stocks surged, with some hitting the upper price limit.

According to the Korea Exchange on the 17th, as of 10:46 AM, Moa Data was trading at 2,695 KRW on the KOSDAQ market, up 0.94% from the previous trading day. Moa Data, a manufacturer developing equipment for ICT system anomaly detection and prediction, closed the previous day at 2,670 KRW, up 29.93%. Data Solution also closed at 6,070 KRW, up 14.10%, after reaching a high of 25.56% during the session before giving up some gains. Additionally, Zoom Internet (4.29%) and Openbase (3.37%) closed higher. These stocks also saw intraday highs of 16.90% and 8.24%, respectively.

The rise in data-related stocks is attributed to the so-called 'Kakao Outage Prevention Act.' The amendment to the Framework Act on Telecommunications Development, known as the Kakao Outage Prevention Act, aims to prevent a recurrence of the Kakao service disruption caused by the fire at SK C&C's Pangyo Data Center on the 15th of last month. If the government’s corrective orders are not followed, fines and penalties may be imposed. The amendment centers on data center redundancy and includes measures such as at least one annual government inspection, operation of dedicated personnel for communication facilities, and other provisions. The bill was passed solely by five members of the Democratic Party of Korea, with members of the People Power Party absent. It will undergo further review by the full Science, ICT, Broadcasting and Communications Committee and the Legislation and Judiciary Committee before final approval by the National Assembly plenary session.

The securities industry evaluates that while data-related stocks gained attention due to the Kakao outage incident, their growth is not just a temporary spike but a structural expansion. This is because the data center and cloud infrastructure markets are continuously expanding, and corporate investments in this sector are increasing.

The IT Operations Management Solutions (AIOps) market, which targets the data center and cloud infrastructure markets as its upstream industries, is expected to grow rapidly from about $3.3 billion in 2019 to approximately $38.6 billion by 2027, a more than tenfold increase.

Choi Jae-ho, a researcher at Hana Securities, said, "Moa Data, which targets the data center and cloud infrastructure markets as upstream industries, is expected to benefit structurally from the steady growth of the market," adding, "The continuous expansion of public and large enterprise clients is also noteworthy."

Na Seung-du, a researcher at SK Securities, also analyzed, "Moa Data's client base increased from 13 in 2018 to 255 in 2021," and "Especially this year, due to the increase in clients and expansion of application areas, more than 20% annual growth in scale is expected."