"KakaoPay's 'Deficit March' Surges Over 80% This Month"

[Asia Economy Reporter Ji Yeon-jin] KakaoPay's corporate value has been soaring this month. This is due to the revival of investment sentiment in technology stocks as expectations of an inflation peak-out spread. However, KakaoPay's operating loss in the third quarter nearly increased by 10 billion KRW, and it has yet to turn a profit since its listing, raising concerns about the need to verify its future growth potential.

According to the Korea Exchange on the 18th, KakaoPay's stock price has jumped 83% this month. Following Indief (which surged 120% due to the possibility of Ssangyong Construction winning the Neom City project and holds a 64.96% stake in Global Sea, the largest shareholder of Ssangyong Construction) ranking second in the KOSPI market returns this month. Last month, the US Consumer Price Index (CPI, 7.7%) fell below market expectations (7.9%), which appears to have improved investment sentiment toward growth stocks that had plummeted due to interest rate hikes.

In particular, on the 11th, foreigners bought about 360,000 shares, causing a sharp rise and closing at the upper price limit. Subsequently, individual investors expanded their purchase volume, continuing the stock price increase.

However, KakaoPay recorded an operating loss of 9.7 billion KRW in the third quarter this year, continuing its losses since listing. Last quarter's revenue was 141.4 billion KRW, a 23% increase year-on-year, but operating expenses rose 30.3% to 151.1 billion KRW. Payment fees and labor costs increased significantly due to the launch of new financial services.

As the timing of KakaoPay's turnaround to profitability is delayed, Kyobo Securities lowered its target price from 110,000 KRW to 60,000 KRW, and Samsung Securities maintained a 'hold' investment opinion on KakaoPay. Similar to KakaoBank, there are concerns about the need to verify growth potential as a platform. Researcher Kim Jae-woo of Samsung Securities stated, “Competition is intensifying amid a deteriorating financial platform market, and it is necessary to confirm KakaoPay's performance in dominating the financial platform.”