SK Securities on the 9th said shares of Kakao could be expected to rise when the monetization potential of its artificial intelligence (AI) agents becomes visible. It maintained its investment rating of Buy and cut its target price to 74,000 won from 87,000 won. Kakao's previous closing price was 47,850 won.
SK Securities forecast Kakao's first-quarter revenue this year at 1.94 trillion won, operating profit at 184.2 billion won, and net profit attributable to controlling shareholders at 132.9 billion won. In particular, it said operating profit would slightly exceed the consensus (market average estimate) of 173.1 billion won.
Nam Hyo-ji, an analyst at SK Securities, said, "Advertising revenue remains consistently solid from the previous quarter," adding, "Talk Biz advertising revenue is 328.7 billion won, and after the KakaoTalk revamp, diversification of ad products and expansion of ad inventory are increasing demand from new advertisers."
However, for transaction-type revenue, growth slowed as self-purchase promotions expanded, and it added that the content segment still has not shown signs of recovery.
It projected that Kakao's results this year will be led by the advertising business. Nam said, "The advertising business, which is showing clear growth this year, will lead overall results, and in the AI business, while building out the ecosystem, it is expected to expand the business at the same time."
Kakao was expected to streamline noncore businesses by selling its equity stakes in healthcare, Daum, and Kakao Games, and to focus on Talk and AI businesses. Its AI agents were also projected to steadily expand domestic and overseas partners throughout the year.
Nam said, "In the short term, the stock price is expected to trade in a range, as it is difficult to confirm AI outcomes," adding, "We could expect an uptrend when monetization of the agents becomes visible."