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[Alpha Biz= Paul Lee] Samsung Securities has lowered its target price for Kakao by 19.2% to KRW 59,000, while maintaining a “Buy” rating.

Analyst Oh Dong-hwan said the revision reflects declining valuations among peer companies and expected revenue contraction following the divestment of subsidiaries. While selling loss-making units is expected to improve profitability, he noted that Kakao needs to present new growth drivers to support a valuation rebound.

The sale of stakes in subsidiaries such as Kakao Games and AXZ (Daum) is expected to remove operating losses from Kakao’s consolidated earnings this year. However, the analyst emphasized that identifying new growth engines to replace the divested content businesses remains a key challenge.

Oh also pointed out that Kakao’s recent AI-related launches—including “ChatGPT for Kakao” and “Kanana in KakaoTalk”—have yet to drive meaningful traffic growth. He noted that while AI agents are central to the company’s long-term strategy, monetization remains limited due to performance constraints and restricted data utilization.

For the first quarter, Samsung Securities projected revenue of KRW 2.01 trillion and operating profit of KRW 171.1 billion, representing year-on-year increases of 8.1% and 48.9%, respectively.

Growth is expected to be driven by talk-based advertising (+17%), commerce (+6.4%), mobility (+23%), and payments (+23%), while declines are forecast in gaming (-28%) and story content (-3.9%). Overall content revenue is projected to decrease slightly by 2.4%, despite growth in music and media segments.

 

 

 

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