Kakao posted its largest quarterly performance ever in the second quarter (April to June) of this year, causing its stock price to surge.
Kakao's stock closed at 63,600 won on the KOSPI market on the 7th. The stock price rose by 11.97% (6,800 won) compared to the previous day. This marks the first time that Kakao's stock has surpassed the 60,000 won mark since the 11th of last month.
The performance ignited investor sentiment. Kakao announced that it recorded a consolidated revenue of 2.0283 trillion won and an operating profit of 185.9 billion won for the second quarter of this year, according to preliminary estimates. This is up 1% and 39%, respectively, compared to the same period last year. In particular, it exceeded the market's expected operating profit forecast (126 billion won) by about 48%.
Kakao explained that it was able to achieve good results as all business sectors except for the content sector grew evenly. Kakao plans to significantly overhaul its KakaoTalk service in the second half of this year and also expand its artificial intelligence (AI) ecosystem.
Securities firms raised their target stock prices for Kakao following its earnings announcement. Hanwha Investment & Securities set the target price at 80,000 won, while Mirae Asset Securities proposed a target price of 70,000 won for Kakao. Currently, the highest price is set at 100,000 won by Kiwoom Securities.
Lim Hee-seok, an analyst at Mirae Asset Securities, noted, "Even if the time spent on KakaoTalk increases by only about 10% due to the application overhaul and AI service launch, there is sufficient room for additional profit growth."
Kim So-hye, an analyst at Hanwha Investment & Securities, said, "In the second half, the core business will improve, and the synergy with several subsidiaries will also intensify."