SEOUL, Dec. 30 (Korea Bizwire) — Foreign investors recently have been scooping up shares of Kakao Corp., the operator of South Korea’s largest messaging app Kakao Talk, on expectations of a rosy earnings outlook, data showed Monday.
Foreigners net bought 96.64 billion won (US$83.6 million) worth of Kakao shares in the Dec. 2-27 period, according to data compiled by the Korea Exchange (KRX).
Foreigners net purchased Kakao every day during the month except for two days.
In the previous three days, Kakao was among the top 5 picks by foreign investors, rivaling traditional heavyweights Samsung Electronics and SK hynix.
Kakao, also the operator of Daum, the country’s second-largest internet portal, was foreigners’ no. 1 pick, even on Friday, the ex-dividend day when stock prices generally fall.
They net bought some 21 billion won worth of Kakao shares that day, the largest daily purchase of Kakao stocks since Nov. 13.
Kakao shares closed at 153,500 won Friday, up 3.72 percent from the previous session.
Foreign investors’ growing appetite for Kakao is driven by rosy earnings outlook for its mobile ad services and other platform businesses.
On Oct. 7, Kakao launched the beta version of Talk Biz Board, a move that raised the service’s daily sales from 200 million won-300 million won to 400 million won-500 million won.
“Kakao’s Talk Biz Board has strong demand for ads, which will push up the bidding prices and speed up Kakao’s overall sales growth,” said Seong Jong-hwa, an analyst at eBEST Investment & Securities Co.
Seong expected Kakao’s overall earnings to double in 2020, with estimated sales of 3.1 trillion won and estimated operating profit of 426.2 billion won.
Kakao also completed a technical setup for its new stock trading service through Kakao Pay. The new service, which links Kakao’s financial service with brokerage services, is awaiting the regulator’s approval.