[Click eStock] Naver Expands Commerce and Content in Global Markets

[Asia Economy Reporter Lee Seon-ae] IBK Investment & Securities stated on the 22nd that strong growth is expected in commerce and global content services for Naver (NAVER), maintaining a buy rating and a target price of 560,000 KRW.

Lee Seung-hoon, a researcher at IBK Investment & Securities, explained, "In the second half of the year, growth momentum is expected to strengthen through the expansion of commerce and content services domestically and internationally." He added, "Commerce is expected to see increased usage as about 70 brands join fulfillment by the end of Q3 and Emart's grocery shopping service begins, providing faster delivery." He continued, "Also, since Smart Store started its beta service in October, synergy with Yahoo Japan is expected to yield results from 2022. Global webtoons are expected to maintain high growth by strengthening monetization, such as adding a webtoon studio to Wattpad."

Naver recorded Q3 sales of 1.73 trillion KRW (YoY +26.9%, QoQ +3.8%) and operating profit of 349.8 billion KRW (YoY +19.9%, QoQ +4.2%). The top line met consensus as the search platform grew steadily by 16.2% YoY, while content, fintech, commerce, and cloud grew by 60.2%, 38.9%, 33.2%, and 26.2%, respectively.

The search platform drove overall growth with PC performance-based ads introduced and display ads with expanded inventory growing 33.2% YoY. Commerce grew 33.2% YoY as the number of Smart Stores increased to 470,000, and shopping live and brand store transaction volumes grew more than 13 times and 3 times YoY, respectively. In fintech, Naver's payment amount increased by 39% YoY to 9.8 trillion KRW due to expanded online and offline partnerships, resulting in a 38.9% YoY increase in revenue. The content segment saw webtoon sales increase 79% YoY due to global cross-border content expansion, and Snow's sales more than doubled YoY with the addition of camera and Zepeto revenue models. The cloud segment grew 26.2% YoY as large domestic companies newly joined, continuing its growth as the second-largest cloud provider in Korea. Partner-related costs increased 33.5% YoY due to higher sales-linked commissions, and marketing expenses rose 29.5% YoY due to increased pay promotions. However, development and operation costs related to labor decreased 2.6% QoQ, resulting in operating profit slightly exceeding consensus.

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