Kakao Pay plunges 12% following JP Morgan report

Korea Economic Daily

Summary

It was reported that Kakao Pay closed down 12.44% at 69,700₩.
J.P. Morgan announced it had downgraded its investment rating for Kakao Pay from ‘neutral’ to ‘underweight’.
The target share price has been set at 42,000₩, which is 40% lower than the current price.

Kakao Pay, which had previously surged as a beneficiary of the stablecoin boom, plummeted on the 14th. On this day, Kakao Pay closed at 69,700₩ on the KOSPI, down 12.44%. This marks a 38.86% drop from the peak (114,000₩) recorded on the 25th of last month.

Other stablecoin-related stocks also fell simultaneously, including Me2on (-13.19%), LG CNS (-6.11%), and Aton (-5.99%).

This is interpreted as the result of securities firms at home and abroad warning about uncertainties in stablecoin policy. Hyun-jong Jung, a researcher at Korea Investment & Securities, pointed out, “Even if the issuance of Korean-won stablecoins materializes, the global utility of virtual assets based on non-key currencies like the won will remain limited.”

J.P. Morgan downgraded its investment opinion on Kakao Pay from ‘neutral’ to ‘underweight’. J.P. Morgan commented, “The current share price is justifiable only if the operating margin increases to the 30% level (this year’s estimate is 2.37%).” The target price was set at 42,000₩, 40% lower than the current level.

Reporter Hanshin Park phs@hankyung.com