[Alpha Biz=(Chicago) Reporter Kim Jisun] Securities firms have recently lowered their target stock prices for Internet bank Kakao Bank.

Although it performed better than expected in the third quarter and its asset soundness is good, uncertainties have grown as financial authorities launched an investigation into Kakao, a major shareholder.

Kakao Bank announced on the previous day that its cumulative net profit in the first to third quarters of this year was 279.3 billion won, up 37.9% from 202.5 billion won in the same period last year. This is the largest accumulation in the third quarter.

"The third-quarter net profit exceeded the consensus by 16.6 percent, up 21.2 percent on-year and 16.4 percent from the previous quarter, and net interest gains exceeded the increase in reserves and showed good performance. The sound situation is better than concerns considering that the portion of heavy-credit loans is nearing the target level," Hyundai Motor Securities Co. said in a report on the 9th.

Despite the positive performance, the stock price of Kakao Bank is sluggish. Securities firms attributed it to the judicial risks of major shareholders and major executives of Kakao, which holds a 27% stake in Kakao Bank, and the resulting uncertainties in governance and future sales strategies.

"The reason why we are lowering the target price of Kakao Bank despite its good performance is because we believe that there is a lot of uncertainty in governance and growth potential," Hana Securities said. "The recent issue of curbing household debt will inevitably affect individual banks, and the recent risk of major shareholders will inevitably affect multiple (corporate value compared to profitability)."

Hyundai Motor Securities lowered the target price of Kakao Bank from 30,000 won to 28,000 won and maintained its purchase opinion. Hana Securities lowered its target price from 33,000 won to 28,000 won and stuck to its buying opinion.

Mirae Asset Securities said Kakao Bank performed better than expected in the third quarter and is managing asset soundness indicators in a stable manner. However, the target price was lowered from 34,000 won to 32,000 won and the purchase opinion was kept.

In addition, KB Securities maintained its target stock price of 29,000 won and buying opinion, while Daishin Securities and eBest Securities maintained their target stock price of 36,000 won and 32,000 won, respectively. Samsung Securities stuck to its target stock price of 24,000 won and its holding opinion.

 

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