[Click eStock] "Naver Expected to Surpass 1 Trillion KRW Operating Profit This Year"

Representative of the Untact Era Triggered by COVID-19
Mid- to Long-Term Growth Potential Further Strengthened

[Asia Economy Reporter Minwoo Lee] There is an analysis that NAVER's mid- to long-term growth potential has been further strengthened due to the acceleration of the 'untact (contactless)' era triggered by the novel coronavirus infection (COVID-19).

On the 21st, Ebest Investment & Securities maintained a 'buy' rating on NAVER and raised the target price by 16% to 290,000 KRW. Sung Jong-hwa, a researcher at Ebest Investment & Securities, explained, "A continuous upward trend has appeared after the first quarter earnings announcement, which is by no means excessive," adding, "It is natural to receive a premium as a representative stock of the untact era triggered by COVID-19."

NAVER recorded sales of 1.7321 trillion KRW and an operating profit of 221.5 billion KRW in the first quarter of this year. These figures represent increases of 14.6% and 7.4%, respectively, compared to the same period last year. Key untact sectors such as NAVER Pay and NAVER Shopping confirmed direct sales benefits from COVID-19. In the case of NAVER Pay, the payment amount in the first quarter increased by about 46% compared to the same period last year, exceeding the initially expected growth rate in the mid-30% range. The transaction amount of Smart Store in the first quarter also increased by 56% compared to the same period last year.

Not only direct sales benefits but also future growth potential have been further strengthened. It is analyzed that NAVER's business environment has become more favorable due to the acceleration of the untact era. Researcher Sung said, "In addition to existing core businesses, B2B solutions such as Cloud, Clover, and Works are gaining various opportunities thanks to untact environmental changes like remote work and online school openings," and explained, "Although the advertising sector was sluggish in the first quarter due to the consumption downturn caused by COVID-19, it is expected to benefit in the mid- to long-term from the accelerated expansion of the online untact advertising market share."

For these reasons, Ebest Investment & Securities forecast that NAVER will achieve sales of 7.4206 trillion KRW and an operating profit of 1.1199 trillion KRW this year. Compared to last year, sales are expected to increase by 12.5% and operating profit by 57.7%.

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