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[Alpha Biz= Reporter Kim Minyoung] Samsung Securities has evaluated that Kakao is experiencing overall growth slowdown. Consequently, they have lowered the target price from KRW 59,000 to KRW 51,000 while maintaining a 'buy' rating. As of the 11th, Kakao's closing price was KRW 42,350.
According to Samsung Securities, "2Q revenue growth is expected to be limited to a 5.8% increase year-over-year due to growth slowdown across all business segments excluding KakaoPay and Kakao Mobility."
They further noted declines in Kakao Games revenue by 12% compared to last year, a slowed growth rate in the music sector to 3% post-SM acquisition effects, and content revenue growth limited to 1%.
Regarding Talk Biz, Samsung Securities anticipates a growth slowdown to 7% due to slower Bizboard advertising growth. They project 2Q operating profit to reach KRW 125 billion, a 10.5% increase, falling 13.7% below market expectations due to revenue growth slowdown, increased marketing expenses related to Japan's Piccoma, and additional depreciation and outsourcing infrastructure costs related to new data centers.
Despite appointing Jung Shin-ah as CEO over six months ago, Kakao has yet to present new growth strategies. Analyst Oh remarked, "While AI development organization integration has progressed, uncertainty among investors has risen as schedules for new model launches or AI service directions remain undisclosed."
Furthermore, Kakao faces challenges in its core advertising business, struggling to adapt to market shifts towards short-form videos and declining media attractiveness due to decreased per capita usage time.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
