Korea's retail favorite stocks Samsung Elec and Kakao mixed in summer rally

Top retail favorite stocks in Seoul are performing mixedly, with Kakao touching new heights in summer rally whereas Samsung Electronics remains lethargic despite promising memory chip outlook.

Kakao touched 70 trillion won ($61.5 billion) milestone in market capitalization on Monday morning on a 2.9 percent surge in its share price to 159,500 won. Kakao shares closed unchanged at 155,000 won.

The platform giant landed comfortably at No.3 on Kospi after neck-in-neck race with Naver, a longstanding leader in the internet category until it was humbled by the latecomer.

Market analysts have revised upward their target prices for Kakao. Samsung Securities said Monday that it has upped its target stock price for Kakao from 157,000 won to 200,000 won and maintained a Buy rating, citing “the rising corporate value of its major businesses such as advertisements, e-commerce and paid content.”

“As Kakao’s core businesses continue to see an upsurge in the number of users and revenue, corportate value of its units will grow over time,” said Samsung Securities analyst Oh Dong-hwan.

Hana Financial Investment also raised its target price for Kakao to 190,000 won from 140,000 won and maintained a Buy recommendation. Analyst Hwang Seung-taek said the target price has been recalculated based on an estimated value of 33 trillion won of its major subsidiaries and 30 percent discount for a conservative estimate.

Meanwhile, the country’s top heavyweight Samsung Electronics fell below the 80,000 mark to close at 79,900 won on Monday. It has been in losing streak for three consecutive trading days.

Its stalemated performance has anguished 3 million-odd retail investors.

“Samsung Electronics is expected to post sound earnings for the second quarter, but there are concerns that its peak would be faster at the third quarter,” said Lee Soon-hak, an analyst from Hanwha Investment Securities.

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