[THE INVESTOR] Kakao’s earnings are likely to improve, said KTB Investment and Securities on Aug. 10, upgrading the recommendation to a “buy” from a “hold” and raising the target price to 150,000 won (US$133.39) from 130,000 won.
Its operating profit fell 38.2 percent on-year to 27.6 billion won, but was in line with market expectations. Solid growth of earnings from advertising, games and commerce in addition to limited rise in costs bolstered its bottom line. Effective execution of costs will maintain marketing and personnel costs at the level of the first half, while its earnings will turn around as early as the fourth quarter, said analyst Lee Min-a.
New businesses including Kakao Bank will show results and it will expand horizons of sectors, entering music and video sectors exploiting entertainment management, ad agency and Kakao Page, said the analyst.
By Hwang You-mee (firstname.lastname@example.org)