May 02, 2024
Stocks & Bonds
[EQUITIES] ‘Kakao to be boosted by subsidiaries’
[THE INVESTOR] Kakao’s subsidiaries are expected to expand their businesses, said Kyobo Securities on Aug. 20, maintaining a “buy” recommendation and raising the target price to 180,000 won (US$160.76) from 160,000 won.
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Investors should pay attention to the potential of Kakao Page, Kakao Pay and Kakao Bank. Kakao Bank, in particular, will launch an insurance service in the second half and a number of financial services next year. When regulations ease on separating banking and commerce, Kakao could become a major stakeholder of its bank affiliate. Synergies among Kakao Bank and other subsidiaries could accelerate improvement of return on equity, said analyst Park Geon-yeong.
Meanwhile, Kakao Games is concentrating on mobile arcade and puzzle games, and will release them for those utilizing Kakao Friends IP and KakaoTalk platform. Although increasing marketing and commission costs for the payment service and investment in new businesses will slow down profits, expanding subsidiaries will maintain growth, added the analyst.
By Hwang You-mee (glamazon@heraldcorp.com)
