[Click e-Stock] "Kakao, Anticipated Changes in the Second Half"

On May 20, Korea Investment & Securities highlighted the importance of paying attention to Kakao's momentum as the company actively adopts artificial intelligence (AI).

Jung Hoyoon, a researcher at Korea Investment & Securities, stated, "Kakao is preparing to launch a new messenger called Kanana, which features a built-in AI Mate." He added, "Starting with this, in the second half of the year, Kakao is developing AI Mates that can assist users in a variety of areas, including AI agents and commerce, through its collaboration with OpenAI."

He emphasized, "Although performance may remain somewhat sluggish through the first half of the year, it is important to focus on the AI-driven momentum that will begin in the second half."

Jung maintained a 'Buy' investment rating for Kakao, with a target price of 49,000 won.

He explained, "From the second half of the year, new display ad products will be launched through a revamp of KakaoTalk, and mobility demand, which was weak in the first quarter, will also recover, leading to gradual improvement in performance. In addition, as the most important AI-related service outcomes in the internet industry are also scheduled for release in the second half, we can expect both performance improvement and momentum."

Meanwhile, Kakao reported weak results in the first quarter. Revenue and operating profit were 1.86 trillion won and 105.4 billion won, respectively, representing a decrease of 6.3% and 12.4% compared to the same period last year. While advertising growth rate dropped sharply to 2.7% due to sluggish display ad sales, commerce revenue growth rebounded to 9.7%.