[Click eStock] "Naver, Focus on Techfin and Overseas Business This Year"

IBK Investment & Securities Report

[Asia Economy Reporter Minji Lee] IBK Investment & Securities maintained a buy rating and a target price of 400,000 KRW for Naver on the 11th. This year, the company is expected to improve its performance through its techfin business and overseas expansion.

Fourth-quarter sales are projected to reach 1.4751 trillion KRW, with operating profit at 334.3 billion KRW, representing increases of approximately 35% and 87% year-on-year, respectively. Due to increased internal activities amid the COVID-19 pandemic in the fourth quarter, commerce, content, and fintech sales are estimated to have grown by more than 40% compared to last year. Seunghoon Lee, a researcher at IBK Investment & Securities, stated, “Although marketing expenses related to Naver Fintech and Naver Pay have increased alongside the global expansion of webtoons, operating profit margin is expected to improve by 0.55 percentage points compared to the previous quarter due to top-line growth.”

This year, stable growth is anticipated as domestic techfin business and overseas expansion accelerate. Recently, Naver Financial launched a smart store business loan, and within one month of its release, 16% of merchants with monthly sales exceeding one million KRW for three consecutive months applied, with about 40% of applicants approved for loans.

Lee explained, “Notably, 52% of merchants without prior financial history were approved for loans,” adding, “We plan to expand the loan market through an AI-based alternative credit evaluation system that analyzes sales, customers, and return rates.”

The management integration of Line and Yahoo Japan in Japan and overseas sales growth centered on webtoons are also expected. The merger is anticipated in March, with a 32.65% stake to be secured in the integrated corporation. As the largest platform company in Japan combining messenger, search, and e-commerce, it will compete with Rakuten and Amazon Japan. Since digitalization in Japan has accelerated post-COVID-19, platform companies’ performance is expected to grow rapidly.

Lee said, “Webtoons have surpassed 67 million global MAU and 10 million MAU in the U.S., accelerating top-line expansion,” adding, “As amateur creator platforms activate by country, it is highly likely to evolve into the world’s largest content production platform.”

With the activation of amateur creator platforms by country, it is also highly likely to evolve into the world’s largest content production platform. He continued, “Monetization through multi-use of webtoon IPs, such as the recent hit ‘Sweet Home’ on Netflix, will also progress rapidly.”

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