[Click eStock] "For Kakao, the Key Is AI Adoption, Not App Update"

On October 10, Daishin Securities analyzed that the core of KakaoTalk lies in the introduction of artificial intelligence (AI) services.

Lee Jieun, a researcher at Daishin Securities, stated, "Following last month's KakaoTalk app update, there have been concerns about user traffic loss and negative public sentiment," adding, "In response to user backlash over the app update, Kakao has decided to roll back the changes in the fourth quarter of this year."

She further commented, "We believe the impact on advertising performance forecasts will be minimal," and added, "The core of KakaoTalk will be the adoption of AI services."

She predicted, "KakaoTalk will introduce ChatGPT at the end of this month," and "Next month, it will launch its AI agent feature."

Lee Jieun analyzed, "With the introduction of AI services, we also expect a recovery in the growth rate of advertising and commerce revenue from the existing Talk Biz business." She continued, "From next year, new revenue streams such as subscription services and search advertising can be expected." In addition, she explained, "By 2027, transaction fee revenue will be generated through collaborations with external partners," and emphasized, "Kakao's stock price has been influenced by its revenue growth rate, particularly the recovery of Talk Biz revenue growth, which is its core business."

She stressed, "Next year, the revenue growth rate of Talk Biz, enhanced by AI, will reach double digits for the first time since the COVID-19 period," and added, "Not only Talk Biz, but also subsidiaries such as Pay, Mobility, and Kakao Games are expected to see increased profits next year."