Kakao's Surprise Earnings Still Lead to Target Price Cut as "AI Monetization Is Still Far Off"; CJ ENM Gets a Green Light for a TV Ad Turnaround [Zootopia]

[Financial News] Here is a roundup of major brokerage reports as of the morning of August 7.
Kakao delivered a surprise second-quarter performance, but analysts said it will take time to monetize its artificial intelligence (AI) agent business.
CJ ENM was seen as having passed the bottom of the cycle, with its media division turning profitable on the back of TVING and professional baseball. Semiconductor equipment maker WONIK IPS also drew a positive outlook, as first-half orders surged despite weak second-quarter earnings, suggesting the stock could follow its order backlog higher.
◆Kakao (035720)— Hana Securities / Analyst Lee Jun-ho
- Target price: 58,000 won (down 22.7% from 75,000 won) | Previous close: 38,300 won
- Investment rating: Buy (maintained)
Hana Securities cut its target price for Kakao to 58,000 won, citing weak share performance at its subsidiaries and the timing of monetization for its new AI businesses, even after the company posted a surprise second-quarter result.
Analyst Lee Jun-ho said, "Ultimately, the monetization timing will depend on how quickly traffic is secured," adding, "Until 2027, the focus will be on expanding touchpoints for the agent service and building traffic." The comment suggests that Kakao must first broaden user access and strengthen its traffic base before its AI agent business can begin generating meaningful profits.
Kakao posted operating profit of 277 billion won in the second quarter, beating market expectations thanks to growth in Talk Biz advertising and improved profitability at subsidiaries such as Kakao Pay. The company has set a goal of generating more than 260 billion won in revenue from its new AI businesses in 2028, equivalent to 10% of Talk Biz sales.
Lee also noted, "To bring users into the agent ecosystem, the company needs both shorter user paths through more advanced inference and price competitiveness versus existing products and services," adding, "It will also need time to train data and marketing spending to attract users." He said the market will only be satisfied if Kakao offers differentiated convenience beyond its existing services and makes the necessary upfront investments.※ AI agent (Agentic AI)This goes beyond conventional AI that simply answers questions. Given a goal, it can make its own plan and carry out multiple steps on its own. A representative use case is a service that can choose products and complete payment without step-by-step human instructions.
◆CJ ENM (035760)— Hana Securities / Analyst Lee Ki-hoon
- Target price: 53,000 won (maintained) | Previous close: 34,100 won
- Investment rating: Buy (maintained)
Hana Securities maintained its Buy rating on CJ ENM, saying the company and its subsidiary Studio Dragon are both delivering strong results and moving past a long period of earnings weakness.
Analyst Lee Ki-hoon said, "TV advertising has been weak for a considerable period, with 16 straight quarters of decline and four consecutive quarters of 20%-range declines for CJ ENM," but added, "July appears to have benefited from a rebound effect after an early exit from the FIFA World Cup, and from August onward, a similar tailwind is expected from JTBC-related issues." He said the TV advertising segment, which has contracted for four years, is likely to enter a full recovery phase in the second half and drive earnings.
The media platform division returned to profit in the second quarter, posting an operating profit of 11 billion won thanks to TVING's strong growth. In particular, TVING recorded its first-ever quarterly operating profit of 6 billion won, supported by higher KBO League viewership and the success of its original dramas.
A rebound at the parent company is also positive for its subsidiaries. Lee added, "A rebound in TV advertising could lead to higher production spending or expanded programming, which would create positive momentum not only for ENM but also for its subsidiary Studio Dragon."
◆WONIK IPS Co., Ltd. (240810)— SK Securities / Analyst Lee Dong-joo
- Target price: 190,000 won (maintained) | Previous close: 92,600 won
- Investment rating: Buy (maintained)
SK Securities kept its target price for WONIK IPS at 190,000 won, saying the company posted strong order momentum in the first half and is likely to see revenue recognition accelerate in the second half.
Regarding the second-quarter earnings miss versus consensus, analyst Lee Dong-joo said it was due to "differences in allocation caused by lead times for revenue recognition by region." He added, "Order backlog in the first quarter surged to 400.4 billion won, and some overseas orders are expected to begin contributing meaningfully to revenue in the third quarter." In other words, the earnings weakness was only a timing issue, and the accumulated orders are expected to translate into a sharp earnings expansion from the third quarter.
Lee also said, "It appears that strong order momentum in the first half is being driven by earlier-than-expected expansion schedules at Samsung Electronics' Pyeongtaek Campus Line 4 (P4) PH3 and SK hynix's M15X new fab," adding, "New orders in the second quarter are also estimated to be at a level comparable to, or even higher than, the first quarter." He said equipment orders are concentrated as major domestic semiconductor clients move quickly to expand infrastructure.
Despite recent share-price weakness caused by industry noise, investors should keep an eye on the order backlog. Lee emphasized, "It is worth remembering that equipment makers' stock prices have always moved in line with their order backlogs." As the larger backlog supports medium- to long-term earnings growth, he expects the stock price to follow an upward path as well.

[email protected] Sung Min-seo Reporter