“Kakao Corp.’s AI Expansion Delayed... Share-Price Gains Likely to Remain Limited Through Year-End”

[Financial News] Daol Investment & Securities forecast that Kakao Corp. would post results in line with market expectations for the third quarter this year, but projected that gains in its share price would remain limited through year-end due to delays in expanding its artificial intelligence (AI) business. It maintained its “Buy” rating and target price of 45,000 won.
Kim Hye-young, a researcher at Daol Investment & Securities, forecast on the 12th that “Kakao Corp.’s consolidated revenue for the third quarter will be 2.0015 trillion won, while operating profit will be 241.2 billion won, down 4.1% and up 16.0%, respectively, from a year earlier.” Compared with the previous quarter, the figures would be down 4.6% and 12.9%, respectively, and both revenue and operating profit were expected to meet market forecasts (consensus).
The researcher was particularly cautious about the pace of growth in the AI business. Kakao Corp. launched a membership service priced at 4,900 won per month this month, but the analysis was that further service expansion would be needed to attract new users beyond existing users of Emoticon Plus or Talk Cloud.
In particular, with an extraordinary general meeting scheduled for Dec. 17 to approve a spin-off, the view is that the situation should be monitored until the outcome is known.
Kim said, “Uncertainty remains as an extraordinary general meeting to approve the spin-off is scheduled,” and assessed that “the expansion of the agentic AI business is progressing slowly, so gains in the share price are expected to remain limited through year-end.”

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