Kiwoom Securities announced on August 24 that it has lowered its target price for Kakao from 110,000 won to 70,000 won, citing concerns that the company's strategy of separating its entities to create synergies may not achieve the desired efficiency and completeness compared to previous plans. The investment rating remains at 'buy.'
In a report released that day, analyst Kim Jin-goo explained, "Considering the concerns over the realization of synergies from the split and the dilution of strong ties with frontier companies like OpenAI this year, we are adjusting our long-term performance and related valuation multiples downward."
Kim noted that Kakao has announced a split plan centered on its existing entity, KakaoX, and the newly established KakaoAI. However, he anticipates that the AI business will evolve into a comprehensive autonomous agent rather than remain segmented.
He added, "The split ratio for the newly established KakaoAI is set at 36.5%. This is based on asset value, and under the trend of valuing internet business primarily on revenue, we suggest a fair value assessment ratio of 56.4% for this entity, which is expected to carry the current major cash cows of advertising and commerce-based AI expansion."
Kim concluded, "Therefore, we believe the investment attractiveness of the newly established entity will be significantly high post-split, and there may be room for further adjustments centered on the core value of AI depending on future changes in the intensity of frontier partnerships."
* This article has been translated by AI.
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