Kakao第二季度：没了KakaoTalk你能活下去吗？

Min-Joo Kang+852 2123 2644minjoo.kang@bernsteinsg.com Robin Zhu+852 2123 2659robin.zhu@bernsteinsg.com Charles Gou+852 2123 2618charles.gou@bernsteinsg.com Price Target 035720.KS 65,000 KRW(80,000OLD) Hyrum Caesar+81 3 6777 6979hyrum.caesar@bernsteinsg.com Kakao Q2: Can you live without KakaoTalk? Q2 OP beat by 20%.On Aug 6 (HKT), Kakao posted Q2 print before the market open.Revenue came in at KRW 2.1tn (+9% YoY), while operating profit surged to KRW277bn(+36% YoY), driving margins to 13.2% (+2.6pp YoY). Double-digit digital ad growth (+14%),non-core divestments continued, operating margins improved, and theCoupang Eatspartnership strengthened its agentic AI narrative. Yet the stock barely reacted (again). Onelesson from a decade in equity research, when strong numbers fail to move a stock, themarket is telling you something. That brings us back to the fundamental question. Close Date6 Aug 2026035720.KS Close Price (KRW)38,300Price Target (KRW)65,000Upside/(Downside)70%52-Week Range69,700/32,250ASIAX1,938.44FYEDecDiv Yield0.2%Market Cap (KRW) (B)16,966.17EV (KRW) (B)13,988.53 The gap… What investors want from Kakao.AI narratives are evolving by the week (orfaster), and investors want to see the proof of the execution (or more). Speed of executionis one challenge, but Kakao's bigger hurdle is user behavior -a double-edged sword. We’veargued at February initiation that programming user behaviour is harder than programmingAI. KakaoTalk's near-universal reach is both its greatest asset and its biggest constraint. Thekey question is whether Kakao could monetize its massive user base and drive agentic AIadoption “fast enough” to convince the market. If so, it should narrow the “gap”. Coupang Eats joins the ecosystem.A key question since initiation has been, who will playball with Kakao? The Coupang Eats partnership marks a meaningful win for Kakao's agenticAI ambitions. We've long viewed Kakao as a “WeChat without Mini Programs”, making strongvertical partners critical to its ecosystem strategy. Given the stable food delivery duopoly inKorea, this partnership could have implications beyond Kakao’s AI story, potentially reshapingcompetitive dynamics in Korean food delivery, depending on Kakao AI penetration. A front-runner for Korea's AI push?Kakao reiterated FY26 targets of 10% revenuegrowth and 10%+ OP margin, while guiding for AI revenue to become a meaningfulcontributor by 2028, reaching a double-digit share of Talk Biz revenue (KRW 200bn+). Kakaoaims to grow AI users within KakaoTalk to10M by end-2026, c.20% penetration of its 49musers. Kakao is exploring a way to become Korean consumer-facing AI winner with its strongapplication layer, with potential upside from winning the government's "AI for All" project. Investment Implications DETAILS KAKAO Q2: CAN YOU LIVE WITHOUT KAKAOTALK? Earnings estimate change and valuation We cut our 2027-28 EPS forecasts by 9-10% to reflect more conservative AI monetization assumptions, higher opex andcapex associated with Kakao's AI initiatives, and revisions to non-operating cost assumptions. Assuming annual capex ofapproximately KRW600bn, primarily allocated to data center servers, network equipment, and content-related intangibleassets, as well as future capex growth in line with our revenue assumptions, our new PT is KRW65,000 (old KRW80,00),implying a 32x (previous 38x)1-year forward P/E. Revenue & margin guidance Kakao’s Platform revenue has re-entered a structural growth phase. Management expects double-digit revenue growth andcontinued margin expansion in 2H26, with FY26 likely to exceed its 10%+ revenue growth and 10% OP margin targets. AIinvestments remain manageable and largely offset by growth in ads and commerce. AI is not a margin headwind for now.Kakao expects AI-related opex to remain broadly stable in 2H26, while core ad and commerce businesses continue to fund AIinvestment. Standalone OP margin is expected to remain at elevated levels. AI monetization Meaningful AI monetization starts in 2027. Management expects to establish AI mass adoption by end-2026 and beginmeaningful monetization from next year through transaction fees, AI subscriptions (ChatGPT for Kakao), and a new AI ad model.AI to become a major revenue driver by 2028.Kakao targets AI-related revenue to account for a double-digit percentageof Talk Biz revenue by 2028, positioning AI as a key growth engine alongside advertising and commerce. AI ads are the nextleg of growth for Kakao. As AI services scale, Kakao plans to expand beyond display advertising into intent-based AI searchadvertising, opening up an entirely new monetization opportunity. AI user base & engagement Management expects monthly active users engaging withAI services inside KakaoTalk to exceed 10m by end-2026asAgentic AI features roll out. ChatGPT for Kakao has reached 13m cumulative subscribers, with users sending 6+ messages perday and spending nearly 8 minutes daily on the service. Kanana user retention has