[Click eStock] "Naver Expects Business Synergy from Webtoon Business Management Integration"

Ebest Investment & Securities Issues 'Buy' Rating and 290,000 KRW Target Price... Closing Price on 2nd at 234,000 KRW

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[Asia Economy Reporter Kum Bo-ryeong] Naver (NAVER) is expected to generate business synergy as it moves forward with the management integration of its webtoon business.

According to Ebest Investment & Securities on the 3rd, Naver announced on the 28th of last month that through a stock swap between its subsidiary Webtoon Entertainment (U.S. corporation) and LINE Corp, Webtoon Entertainment acquired all 70% of the shares of LINE Digital Frontier (Japanese corporation) held by LINE, and issued new shares equivalent to the value of the 70% stake in LINE Digital Frontier to LINE.

Previously, the webtoon business, excluding Japan, was operated by Webtoon Entertainment and Watong Entertainment as Naver Webtoon's U.S. and China business entities, respectively. Both are 100% subsidiaries of Naver Webtoon. The Japanese business was divided into two entities: LINE Digital Frontier and LINE Manga. However, after the management integration, the U.S. corporation Webtoon Entertainment will oversee the businesses in Korea, Japan, and China collectively.

Seong Jong-hwa, a researcher at Ebest Investment & Securities, explained, "While the webtoon businesses in Korea and the U.S. focus on long-form serialized content, the Japanese webtoon business centers on short-form standalone volumes. One of the purposes of the management integration is to expand investment in long-form serialized content in the Japanese webtoon business in the future. For this, in the short term, it is necessary to introduce content and creators from Korean Naver Webtoon." He added, "However, under the current shareholding structure of LINE Digital Frontier (Naver Webtoon 30%, LINE 70%), due to Japan's hierarchical shareholding characteristics, Naver Webtoon could not lead the business. It could only observe or provide basic guidance and could not lead operational efficiency improvements. By changing the shareholding structure of LINE Digital Frontier, it has become possible to expand investment focused on long-form serialized content in the Japanese webtoon business. The company plans to expand the long-form serialized business starting in the second half of the year immediately after completing the first phase of integration in August."

Ebest Investment & Securities has given Naver a 'Buy' rating with a target price of 290,000 KRW. The closing price on the 2nd was 234,000 KRW.

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