[Click eStock] "KakaoPay, 4Q Loss Expected... Target Price Up"

[Asia Economy Reporter Hwang Yoon-joo] Shinhan Investment Corp. stated on the 27th that Kakao Pay is expected to report a consolidated loss for the fourth quarter of last year. However, the increased likelihood of inclusion in the MSCI index was evaluated positively. Accordingly, the investment rating was 'maintained' and the target stock price was raised to 74,000 KRW.

Researcher Lim Hee-yeon of Shinhan Investment Corp. said, "The consolidated sales for the fourth quarter are estimated at 132.3 billion KRW, with an operating loss of 24.3 billion KRW."

Researcher Lim explained, "The main culprit is the poor performance of the subsidiary securities company," adding, "Due to a favorable stock market environment, tightening of the real estate PF market, and increased marketing expenses, net operating income is expected to be 6.5 billion KRW (-43%), and operating loss 13.8 billion KRW (continued deficit)."

However, the recent increased possibility of MSCI index inclusion is positive. Researcher Lim said, "The main issues are the easing of regulations on Chinese big tech and the possibility of MSCI index inclusion," and analyzed, "Considering the anticipation of Ant Financial's IPO, the likelihood of overhang shares from the second largest shareholder being released has decreased." In the past, Alipay Singapore Holdings had released shares equivalent to about 10%.

The recent stock price increase was evaluated as largely influenced by supply and demand. He stated, "The reason supply and demand have a significant impact on the stock price is that, as of the previous day, the company's shareholding structure consists of Kakao (46.9%), Alipay Singapore Holdings (34.8%), National Pension Service (5.0%), and employee stock ownership (2.3%), so the floating shares account for only 11.1% of the total."