Naver Benefits from Untact Era... Target Price Upward Revision

[Asia Economy Reporter Park Jihwan] Shinhan Financial Investment stated on the 26th that regarding NAVER, "Negative impacts on advertising are expected to be inevitable until the second quarter, but changes in consumption habits brought by untact will have a greater effect." It is analyzed that NAVER will benefit from the expansion of non-face-to-face consumption due to various services such as webtoons, cloud, Line Works, and Band, in addition to commerce. Accordingly, the investment opinion was raised to 'Buy' and the target stock price was adjusted upward by 4.7% to 225,000 KRW from the previous level.

Researcher Lee Moonjong of Shinhan Financial Investment said, "NAVER's first-quarter performance recorded sales of 1.73 trillion KRW and operating profit of 221.5 billion KRW," adding, "Business platform sales grew 12% year-on-year due to increased online shopping despite advertisers' budget cuts, and the IT platform grew 49.4% year-on-year due to increased NAVER Pay transaction volume."

He explained, "Advertising sales grew only 1.2% year-on-year due to the impact of COVID-19, but the application of the smart channel in May will help defend against sales decline," and "The Line and other segments significantly improved their deficit, contributing to the earnings surprise."

Due to the impact of COVID-19, e-commerce indicators also improved significantly.

The researcher analyzed, "The number of Smart Store users increased to 10 million in March, and monthly NAVER Pay users rose to 12.5 million (+23%). Among them, users aged 50 and above increased by 53%, which is estimated to indicate that consumers who only shopped offline have expanded their base to online as well."

He added, "Brand stores currently number 30 and plan to expand to 200 within the year," and predicted, "The relatively insufficient delivery sector is expected to cooperate with various businesses."

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