DB Securities, Kakao target price drops… “Performance in the third quarter is likely to fall short of expectations.”

(Seoul = Yonhap News) Reporter Kim Yu-ah = DB Securities [016610] announced on the 16th that Kakao [035720]'s performance in the third quarter of this year is expected to fall below market expectations, and that it lowered its target stock price by 17% from 57,000 won to 47,000 won. The investment opinion was maintained at Buy.

Researcher Shin Eun-jeong analyzed in the report that day, "Kakao's third quarter sales are expected to fall 2.2% year-on-year to 2.0412 trillion won, and operating profit is 249.5 billion won, a 19% increase, falling below market expectations."

According to DB Securities, the consensus (market average forecast) for Kakao's third quarter sales and operating profit is KRW 2.0829 trillion and KRW 262.3 billion, respectively.

Researcher Shin said, “The growth rate of platform sales, which showed stable growth in the first half of the year, is expected to slow slightly, and advertising is expected to increase by only 13% compared to the previous year due to the influence of holidays.” He added, “Pay will see a decrease in transaction amount, and mobility will see a decrease in taxi rides during the holiday season.”

He pointed out, "It is positive that the company is maintaining a stable profit level compared to the previous year. For the stock price to trend upward, clear artificial intelligence (AI)-related performance or a specific profit model is needed."

Recently, Kakao announced the launch of AI agent Canana Space and Kanvas, a PC-based agent creation tool, which are scheduled to be released next year.

Kakao's closing price the previous day was 31,000 won.