"COVID-19, Both a Crisis and an Opportunity"... Naver Rewrites Its All-Time High Record Again

[Asia Economy Reporter Koh Hyung-kwang] Naver (NAVER) has reached an all-time high again. The driving force behind this was its steady performance despite the spread of the novel coronavirus infection (COVID-19). Experts predict that Naver's market dominance will be further strengthened due to the expansion of untact (contactless) consumption caused by the COVID-19 pandemic.

According to the Korea Exchange on the 24th, Naver closed at 190,000 KRW on the previous day in the KOSPI market, up 4.4% from the previous trading day. On that day, Naver's stock price rose to 196,000 KRW during the session, surpassing the previous all-time high of 194,500 KRW recorded on January 14. The 196,000 KRW recorded that day, when converted to the pre-stock split price (1/5) before October 2018, amounts to 980,000 KRW, bringing it one step closer to the 'emperor stock' priced at 1,000,000 KRW per share.

Naver, which hit its yearly low of 109,000 KRW on June 18 last year, has since risen steadily without significant corrections, surging 74.3% in 10 months. Its market capitalization also rose to 31.21 trillion KRW as of the previous day's closing price, ranking 4th in the KOSPI market. Since the low point on June 18 last year, institutional investors have purchased over 810 billion KRW worth of shares, driving the stock price increase.

The strong stock performance of Naver is backed by solid earnings. Naver announced yesterday that its preliminary figures for the first quarter of this year showed sales of 1.7321 trillion KRW and operating profit of 221.5 billion KRW. Compared to the same period last year, sales increased by 14.6% and operating profit by 7.4%, exceeding market expectations. Net profit (134.9 billion KRW) increased by 54.0% compared to the previous year.

Although advertising revenue grew by only 1.2% year-on-year, the demand for online shopping surged significantly due to COVID-19, with Smart Store transaction volume growing by 56% and webtoon transaction volume increasing by more than 60%. Kim Dong-hee, a researcher at Meritz Securities, analyzed, "Advertising spending decreased due to COVID-19, but business platforms and IT platforms showed solid growth due to the expansion of online shopping demand."

Experts predict that Naver will strengthen its business through these changes in consumption habits caused by untact. Lee Moon-jong, a researcher at Shinhan Financial Investment, said, "Various Naver services such as commerce, webtoons, and cloud are benefiting from the expansion of contactless consumption due to COVID-19," adding, "Although negative impacts on advertising are inevitable until the second quarter of this year due to COVID-19, changes in consumption habits following the untact trend are having a greater effect."

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