[Click eStock] 'Calm Before the Storm' Naver... Operating Profit to Reach 1 Trillion Won This Year

Starting from Q2 This Year, Shopping and Finance Show Significant Results

[Asia Economy Reporter Minwoo Lee] Naver (NAVER) is expected to achieve significant growth this year as it shifts its main revenue sources from advertising to shopping, finance, and content sectors.

On the 28th, Meritz Comprehensive Financial Securities forecast that Naver's operating profit will reach 1.2 trillion KRW this year, a 71.5% increase compared to last year. It is anticipated that explosive growth will begin from the second quarter, led by Naver Shopping and Naver Financial. Donghee Kim, a researcher at Meritz Securities, stated, "Naver's growth is expanding from advertising to shopping, finance, and content centered on videos and webtoons," adding, "We expect the concretization of Naver Financial's business, overseas growth of Naver Webtoon, and expansion of local content centered on Naver Reservation."

This year, Naver Shopping is rapidly moving to expand its dominance in the e-commerce market by implementing policies such as 'Najunge Gyeolje (Pay Later)' on January 17, 'Teukga Changgo (Special Price Warehouse)' on February 3, and 'Brand Stower' in March. It is analyzed that if a paid membership service like 'Naver Prime (tentative name)' is introduced in the future, it will significantly increase the effect of retaining customers within the platform.

Already, the world's largest e-commerce service Amazon experienced rapid growth after launching its paid membership service 'Amazon Prime' in 2004. With an annual fee of $119 (approximately 144,000 KRW), it offers various benefits such as free shipping and unlimited music and movie streaming, securing loyal customers. Prime members spent and purchased about twice as much as regular members. As of the end of last year, the number of Prime members worldwide exceeded 150 million.

In South Korea, paid membership services are also being introduced one after another. Representative examples include eBay Korea's 'Smile Club (2 million members)' in 2017, Coupang's 'Rocket Wow Club (3 million members)' in 2018, and Ticket Monster's 'Super Save (240,000 members)'. It is analyzed that if Naver introduces such a paid membership system, it can significantly strengthen its market dominance through various services and content.

Growth in the financial sector is also expected to materialize from the second quarter. This is due to favorable policy support from financial authorities allowing credit provision such as post-payment and installment services, and the anticipated full-scale collaboration with Mirae Asset Daewoo Financial Group. In the second quarter, 'Naver Bankbook' will launch financial services such as mini insurance and mini funds alongside large-scale marketing, based on Mirae Asset Daewoo's Comprehensive Asset Management Account (CMA). According to the Financial Services Commission's 'Fintech Scale-up' strategy, a small loan function will be added to the simple payment service, allowing consumers to settle payments after purchase, enabling payments exceeding the balance limit. Additionally, investment services such as credit card recommendations, securities, and insurance will be officially launched in the second half of the year.

Meritz Securities has given Naver a 'Buy' rating and raised the target stock price to 240,000 KRW. The closing price on the previous day was 182,000 KRW.

This content was produced with the assistance of AI translation services.