April 25, 2024

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Kakao M, a subsidiary of the messenger application heavyweight operates Korea’s largest music service provider Melon, and the merger will allow over 40 million app users to directly access the music service, increasing subscriptions. Growth based on artificial intelligence also will continue as user base of Melon is expanding since SK Telecom’s AI platform allows users to simultaneously connect to both T Map navigation and Melon, said analyst Lee Hak-mu.

Although there is a short-term burden due to the music licensing fees, its current stock price has about 20 percent room to rise. However, the merger ratio of Kakao and Kakao M is 1:0.8 and the former’s stocks are trading at 130,000 won (US$120.35), said the analyst lowering the target price to 104,000 won. 

By Hwang You-mee (glamazon@heraldcorp.com)