Kakao’s plan to split into two listed companies, KakaoAI and KakaoX, has triggered fresh investor concerns and a series of target-price cuts from brokerages. Five of 11 securities firms that issued reports on Kakao on Monday — Hana Securities, Kiwoom Securities, Samsung Securities, Meritz Securities and Daol Investment & Securities — lowered their targets, citing the risk of a holding company discount and uncertainty over the profitability of Kakao’s AI business. The board-approved restructuring would place KakaoTalk and AI operations in KakaoAI, while KakaoX would oversee the remaining affiliates, including data center operator Kakao Enterprise. Kakao says separating businesses with different risk and profitability profiles could simplify decision-making and unlock value from a conglomerate that Kakao Investment and KakaoX CEO Kim Do-young said is undervalued by roughly 50 percent. Critics argue that a new corporate structure will not resolve Kakao’s weak AI performance. Kanana’s monthly active users fell from about 70,000 in May last year to roughly 17,000 three months later, according to Mobile Index, before the service was integrated into KakaoTalk. Kakao shares fell 7.5 percent on Friday despite the split announcement and a shareholder-return policy, as investors remained wary after Kakao’s rapid 2021 listings of subsidiaries including Kakao Pay and Kakao Bank and the subsequent backlash over subsidiary executives selling large stakes. Supporters say the restructuring could accelerate KakaoTalk-AI integration and make decisions faster.