Corporate Logo(source: kakaocorp.com)
On March 14, NH Investment & Securities upgraded its target price for Kakao(035720), citing that the company could address its previously overlooked artificial intelligence(AI) momentum through its partnership with OpenAI. The firm maintained its "BUY" recommendation and raised the target price from 49,000 won to 53,000 won. Kakao’s stock closed at 43,150 won the previous day.
NH Investment & Securities expects Kakao’s operating profit to grow by 30.8% year-over-year to reach 602.1 billion won this year.
Ahn Jae-min, an analyst at NH Investment & Securities, stated, "With the overhaul of KakaoTalk and the partnership with OpenAI, we anticipate increased traffic, the possibility of a subscription model, and the application of AI within services. Additionally, the positive impact of the subsidiaries’ performance improvements is expected to lead to a turnaround in operating profit this year."
Particularly, Ahn forecasts improvements in Kakao's subsidiaries, including Kakao Pay(377300)'s return to profitability, growth in SM Entertainment’s performance, the consolidation of DearU, and a recovery in Kakao Entertainment’s results, all contributing to the expected profit improvement.
Last month, Kakao announced a strategic partnership with OpenAI. Analyst Ahn anticipates that, at the earliest, Kakao will introduce services with AI business models and updates by the first half of the year. These updates may include the introduction of ChatGPT on KakaoTalk, a revamp of Shop Search, the adoption of subscription models, and AI-based shopping recommendations. Ahn concluded that this partnership would resolve the lack of AI-related momentum surrounding Kakao.
*[KOSPI]Kakao(035720) is a platform company that engages in commerce, games, and content, starting with KakaoTalk, a messenger service that has the largest market share in Korea. The market capitalization is 19 trillion 144.6 billion won(as of March 13, 2025, closing price).
Corporate Logo(source: kakaocorp.com)
On March 14, NH Investment & Securities upgraded its target price for Kakao(035720), citing that the company could address its previously overlooked artificial intelligence(AI) momentum through its partnership with OpenAI. The firm maintained its "BUY" recommendation and raised the target price from 49,000 won to 53,000 won. Kakao’s stock closed at 43,150 won the previous day.
NH Investment & Securities expects Kakao’s operating profit to grow by 30.8% year-over-year to reach 602.1 billion won this year.
Ahn Jae-min, an analyst at NH Investment & Securities, stated, "With the overhaul of KakaoTalk and the partnership with OpenAI, we anticipate increased traffic, the possibility of a subscription model, and the application of AI within services. Additionally, the positive impact of the subsidiaries’ performance improvements is expected to lead to a turnaround in operating profit this year."
Particularly, Ahn forecasts improvements in Kakao's subsidiaries, including Kakao Pay(377300)'s return to profitability, growth in SM Entertainment’s performance, the consolidation of DearU, and a recovery in Kakao Entertainment’s results, all contributing to the expected profit improvement.
Last month, Kakao announced a strategic partnership with OpenAI. Analyst Ahn anticipates that, at the earliest, Kakao will introduce services with AI business models and updates by the first half of the year. These updates may include the introduction of ChatGPT on KakaoTalk, a revamp of Shop Search, the adoption of subscription models, and AI-based shopping recommendations. Ahn concluded that this partnership would resolve the lack of AI-related momentum surrounding Kakao.
*[KOSPI]Kakao(035720) is a platform company that engages in commerce, games, and content, starting with KakaoTalk, a messenger service that has the largest market share in Korea. The market capitalization is 19 trillion 144.6 billion won(as of March 13, 2025, closing price).