Corporate Logo(source: kakaocorp.com)
Daishin Securities raised its target price for Kakao(035720) to 50,000 won from 48,000 won, maintaining a "BUY" rating, citing expectations that the artificial intelligence(AI) services Kakao plans to unveil in the first half of this year will boost KakaoTalk's user metrics and drive revenue growth.
The generative AI services that Kakao is set to introduce include four major offerings: KakaoTalk AI Search, AI Mate, Kanana, and products co-developed with OpenAI. Among these, the most anticipated services are AI Search and AI Mate, both of which are expected to be launched in the first half of the year. AI Mate will be introduced as a chat channel within KakaoTalk.
Lee Ji-eun, an analyst at Daishin Securities, stated, "If AI Mate can offer a personalized experience closely connected to users' daily lives, we expect it to improve user metrics such as session time and retention rate(the percentage of users who continue using the app over a specific period), which will lead to an increase in revenue per user within KakaoTalk." The analyst also noted that Meta Platforms successfully improved ad exposure, ad pricing, and commerce conversion rates by incorporating generative AI into its existing app ad products.
Lee added, "Kakao has been working to diversify traffic across different tabs, including adding features to the Friends tab, revamping commerce, and introducing Open Chat tabs. However, these efforts have not produced the expected results." Lee concluded, "If the introduction of AI Mate and AI Search leads to improvements in KakaoTalk’s user metrics, and those improvements translate into growth in advertising and commerce revenues, KakaoTalk’s platform value could be reassessed."
*[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 523.7 billion won(as of March 18, 2025, closing price).
Corporate Logo(source: kakaocorp.com)
Daishin Securities raised its target price for Kakao(035720) to 50,000 won from 48,000 won, maintaining a "BUY" rating, citing expectations that the artificial intelligence(AI) services Kakao plans to unveil in the first half of this year will boost KakaoTalk's user metrics and drive revenue growth.
The generative AI services that Kakao is set to introduce include four major offerings: KakaoTalk AI Search, AI Mate, Kanana, and products co-developed with OpenAI. Among these, the most anticipated services are AI Search and AI Mate, both of which are expected to be launched in the first half of the year. AI Mate will be introduced as a chat channel within KakaoTalk.
Lee Ji-eun, an analyst at Daishin Securities, stated, "If AI Mate can offer a personalized experience closely connected to users' daily lives, we expect it to improve user metrics such as session time and retention rate(the percentage of users who continue using the app over a specific period), which will lead to an increase in revenue per user within KakaoTalk." The analyst also noted that Meta Platforms successfully improved ad exposure, ad pricing, and commerce conversion rates by incorporating generative AI into its existing app ad products.
Lee added, "Kakao has been working to diversify traffic across different tabs, including adding features to the Friends tab, revamping commerce, and introducing Open Chat tabs. However, these efforts have not produced the expected results." Lee concluded, "If the introduction of AI Mate and AI Search leads to improvements in KakaoTalk’s user metrics, and those improvements translate into growth in advertising and commerce revenues, KakaoTalk’s platform value could be reassessed."
*[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 523.7 billion won(as of March 18, 2025, closing price).