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Kakao · 035720 · Internet

Kakao Says No Block Sale or Rights Offering, Cites ₩300B in Shareholder Returns

Why this report

Written after:

Kakao management said on October 20 that it has no plans for a block sale or rights offering, with ₩300B in shareholder returns mentioned in a Yonhap News Agency headline. This eases some financing and dilution worries tied to the spin-off, but it does not change the earnings picture and no filing details are available.

Written Oct 20, 2026 · Data as of Oct 19, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

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What happened

On October 20, 2026, Yonhap News Agency reported Kakao as saying there would be no block sale or rights offering, alongside ₩300B in shareholder returns. Other outlets the same day, including Money Today and Etoday, reported management saying rumors of subsidiary sales are untrue and that there are no plans to sell subsidiaries after the spin-off. Edaily reported harsh shareholder criticism of the split, with questions over who bears responsibility if the stock falls.

No filing excerpts were provided, so we cannot confirm the form, timing or split of the ₩300B (buybacks, dividends or other), nor how it compares with net income. The figures come from news headlines only.

What it changes for the thesis

The previous report described an earnings recovery (trailing operating margin 11.3%, free cash flow of ₩587.7B) and a cash-rich balance sheet (cash ₩8.18T against borrowings of ₩335.0B), with restructuring and labor tension as uncertainties. The statement fits the balance sheet view: with that much cash, a rights offering was never obviously needed. It lowers one restructuring concern, namely dilution or asset sales after the spin-off.

It does not resolve the other issues. Shareholder opposition to the split remains visible, revenue growth was modest (2.9% in 2025), and net margin of 4.2% and ROE of 3.2% are still low. Foreign ownership was 28.8% versus 28.5% sixty days ago, and the foreign net flow over 20 days was about ₩12.3B of selling, so the data shows no clear shift in positioning.

What it changes for the valuation

The shares closed at ₩32,100 on October 19, 2026, up slightly from ₩32,000 in the previous report and still 44.7% lower over one year. The previous report had no model estimate. Now the model gives a DCF-based estimate of ₩32,456 bear, ₩43,171 base and ₩61,041 bull per share at a 7.5% rate, using trailing figures to H1 2026. This is a model estimate based on the assumptions shown, not a price target.

The share price sits just below the bear case and well below the base case. That reflects the model's assumptions about earnings and cash, not a view on where the price will go. The estimate uses filed financials and does not include the news items, so the ₩300B return does not alter it.

On multiples, P/E is 41.0, P/B 1.2 and P/S 1.7, with a dividend yield of 0.2%. NAVER shows a P/E of 13.7 and P/B of 0.9. Enterprise value is ₩6.38T.

Closing view

The October 20 statements remove two possible concerns, dilution through a rights offering and asset sales after the spin-off, and add a stated ₩300B shareholder return whose details are not available. They do not change the filed numbers behind the earlier thesis of improving profit and a strong balance sheet against low returns and a weak share price. The model's range of ₩32,456 to ₩61,041 per share is wide, and the current price is near its low end. Shareholder opposition to the split and the unconfirmed return terms keep the picture mixed until filings give more detail.

Model estimate of fair value

Bear
₩32,456
+10%
Base
₩43,171
+46%
Bull
₩61,041
+107%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the 5-year discounted cash flow model on the stock's Valuation tab (statements TTM to H1 2026; discount rate 7.5%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 20, 2026Update noteNewsKakao Says No Block Sale or Rights Offering, Cites ₩300B in Shareholder Returns
  2. Oct 13, 2026InitiationKakao: Profits Recovering but Shares Down 48.5% Over One Year

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information