Korea Investment & Securities Co. on the 8th said Kakao's platform division is seeing strong results and that monetization using artificial intelligence (AI) will gradually begin. It kept its "buy" rating and 70,000 won target price unchanged. The previous trading day's closing price was 45,250 won.
Kakao's revenue and operating profit in the first quarter of this year were 1.9421 trillion won and 211.4 billion won, respectively. Compared with a year earlier, revenue increased 11.1% and operating profit rose 66%.
Hwang In-jun, an analyst at Korea Investment & Securities Co., said Kakao's revenue and operating profit beat the market consensus, as Talk Biz revenue and other platform revenue both increased and major fixed costs such as labor expenses were well controlled.
Hwang said, "Centered on Talk Biz, revenue growth in platform divisions such as Pay and mobility will continue," adding, "Talk Biz is entering a growth phase as ad inventory expands and advertiser demand increases, and Kakao Pay is also expected to deliver results above market expectations along with high growth in the financial division."
Hwang also said the expected operating profit margin (OPM) will improve to 11.3% this year, following last year, as platform-centered revenue growth aligns with expense efficiencies. He projected operating profit this year will rise 19.9% from last year to 924.6 billion won.
He said, "Along with improved results, monetization using agentic AI, in which artificial intelligence makes its own judgments and executes tasks, will gradually begin," adding, "If the potential for AI monetization becomes visible, the share price, which has been moving sideways for a long time, will trend upward."