[Click eStock] "Naver, Domestic and International Earnings Growth Phase... Low Price Buying Effective"

Korea Investment & Securities Report
Q4 Operating Profit Forecast of 315 Billion KRW

[Asia Economy Reporter Minji Lee] Korea Investment & Securities maintained a buy rating and a target price of 390,000 KRW for Naver on the 5th. They also advised that the recent stock price adjustment could be a buying opportunity amid expectations of continued performance improvement this year.

Naver's fourth-quarter revenue and operating profit are expected to increase by 26% and 13% year-on-year, reaching 1.5 trillion KRW and 315 billion KRW, respectively. This is because the recovery in search advertising is expected to drive search platform revenue to 771.9 billion KRW, an 11% increase compared to last year. Commerce revenue is also expected to continue its high growth, reaching 411.1 billion KRW in the fourth quarter, a 42% increase. Additionally, fintech and content revenues are projected to grow by 60% and 51% year-on-year, reaching 194.1 billion KRW and 126.5 billion KRW, respectively.

The most important aspect for Naver this year is that all business divisions are expected to see revenue growth. Beyond commerce and webtoons, which have been the biggest beneficiaries of the COVID-19 pandemic, advertising growth rates, which were relatively sluggish last year, are expected to recover, and the fintech business model is diversifying, leading to positive changes across all business units.

Overseas, synergy is anticipated from the merger of Yahoo Japan and Line. As Japan rapidly advances its national digitalization, Naver is expected to grow as a key player in various industries in the Japanese market, including commerce and simple payment services. Researcher Hoyoon Jung of Korea Investment & Securities said, “Naver holds a 33% stake in the merged entity, and long-term business cooperation could expand, which is positive for the stock price.”

Researcher Hoyoon Jung added, “Attention should be paid to the rapid revenue growth overseas in webtoons and the establishment of business models,” and emphasized, “The stock price adjustment should be seen as a buying opportunity.”

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