Kakao(035720.KS) hits 52-week high as the court approves Kakao to acquire Kakao Bank’s stock and rise as the majority shareholder. The good results of the second quarter of 2019, also contributed to the increasing price.
Korea Exchange announced that Kakao had reached 136,000 KRW on July 23, which is 2,000 KRW (1.49%) higher than that of the previous day (134,000 KRW). On this date, Kakao has broken its 52-weeks record high price of 136,500 KRW.
Kakao’s share price has been around 100,000 KRW earlier this year. However, it has steeply risen more than 32% up until July 23 and reached 130,000 KRW.
Foreign investment has purchased over 106 billion KRW of Kakao shares this month to lead the stock appreciation. Financial institutions also bought 19 billion KRW as a straight purchase, whereas individual investors sold 117 billion KRW.
The main reason for Kakao’s stock appreciation was the heightened expectancy as the court allows Kakao to acquire Kakao Bank’s share. The share expansion of Kakao has been impossible because Kim Beomsu, the chairman of Kakao, has been prosecuted. However, last month, the share expansion became possible, as Ministry of Government Legislation interpreted that chairman Kim shall not be accounted in the case of Kakao Bank as he does not own any share of Kakao.
Kakao has already announced on July 12 that they will acquire 41.6 million shares of Kakao Bank at 208 billion KRW. After the acquisition, Kakao’s stock possession ratio of Kakao Bank became 34%, which is the maximum possession allowed under the Law on Special Cases of Internet Specialized Bank. The transaction will be finalized if the majority shareholder alteration proposal is passed at the general meeting of the Financial Services Commission.
Kakao’s good results of the second quarter also played a decisive role in the stock appreciation. According to financial information service provider FnGuide, the business profit consensus of Kakao for the second quarter is estimated as 34.3 billion KRW, which is 6.7 billion KRW (24.3%) higher than that of the same quarter of the previous year. Prospect of net profit during the term is expected to be 27.6 billion KRW, which is also 5.1 billion KRW (22.7%) higher than that of the same period of the previous year.
Kim Hakjun, a researcher of Kiwoom Securities, said, “The commercial service will lead their sales with the peak season effect. Premium contents such as Kakao Page will show big growth, and games and music services are expected to show stable results.”
Experts forecast the high growth potential of Kakao, as it strives to diversify its revenue models. Lee Minah, a researcher of KTB Investment & Securities, explained, “The performances of business departments such as Kakao Pay, Kakao Bank, advertisement, commerce, mobility, and premium are all generally improving. Kakao Page and PICOMA are especially planning an IPO in Korean and Japanese markets, respectively in 2020 and 2021.” She also expected, “The values of Kakao Page and PICOMA will gradually be higher based on the rapid increase of transactions and business expansion possibilities.”
Seo Hyeongseok, a researcher of Leading Investment & Securities, said, “Kakao will strengthen their new growth engine such as Kakao fintech and mobility business through the blockchain platform.” He added, “They will establish the blockchain ecosystem by cooperation with various fields such as healthcare, contents, commerce, and sharing economy.”
Lee Jaeseung(2019. 07. 24.) 카카오, 카뱅 대주주 변경 승인 기대감…2분기 호실적도 긍정적
Global Economy Times, retrieved from http://www.getnews.co.kr/view.php?ud=20190724073526326141d0c69529_16
