Brokerages Raise Target Prices for Kakao on Business Expansion

Supported by aggressive moves to move beyond its platform business, South
Korean brokerage firms have charted a good outlook for Kakao and raised their price targets on the company, reports showed Monday.

Some analysts have predicted that popular mobile messaging operator KakaoTalk’s share price will rise to 200,000 won ($ 175.80), up from their previous target prices. The adjustment came after the company rose to third most valuable stocks on the country’s main board, Kospi.

“Kakao’s market capitalization jumped to 68 trillion won, which even exceeds Naver’s market value. … It is thanks to the corporate structure of Kakao which is based on future growth. The company’s business strategy of becoming the first market player to make a profit has also worked, ”said Oh Dong-hwan, analyst at Samsung Securities.

The market watcher also mentioned that it was predictable enough to see Kakao become Kospi’s third largest stock in line with the change in industrial structure. At the same time, Oh predicts that the tech giant behind KakaoTalk will further accelerate the growth of its core businesses.

Hana Financial Investment also raised its target price of Kakao from 35% to 190,000 won, with the securities firm predicting that the company’s stock price would rise further in the second half of this year with various surges and competitiveness in the market. .

“Not only its initial services, but other activities (of the affiliates) such as finance and mobility should recover. Kakao Entertainment has also grown by producing and distributing various content, ”said Hwang Seung-taek, analyst at Hana Financial Investment.

Other brokerages, including Hyundai Motor Securities and DB Securities, have also raised their price targets on expectations regarding the initial public offering and the solid content activities of Kakao subsidiaries, respectively.

Kakao shares hit an all-time high of 159,500 won in intraday trading on Monday, up 2.9% from the close of the previous session. Following the rise in stock prices, its market capitalization also broke the 70 trillion won mark for the first time. As of 2:30 p.m., the stock was trading at 155,000 won, with Kospi losing more than 1%.

By Jie Ye-eun ([email protected])


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