[Click eStock] "Naver, Solid Performance... Timing for Buying Opportunity"

[Asia Economy Reporter Ji Yeon-jin] Korea Investment & Securities announced on the 7th that despite concerns over growth stocks causing NAVER's stock price to decline, steady performance improvements are being made, and they maintain a buy investment opinion with a target price of 450,000 KRW.

Jung Ho-yoon, a researcher at Korea Investment & Securities, stated, "Due to the stock price decline since the beginning of the year, the valuation burden has eased, and the operating profit growth rate is expected to increase further this year," adding, "Although macro uncertainties remain a concern, it is time to seize buying opportunities by observing improvements in fundamentals."

NAVER's stock price has been steadily declining since September last year. The rise in demand for non-face-to-face services due to social distancing measures following the COVID-19 outbreak led to stock price increases for internet companies, but the environment became unfavorable for growth stocks as the U.S. began raising interest rates and due to the war between Russia and Ukraine.

Concerns that the high revenue growth of internet companies, which began in the second half of 2020, would gradually slow after peaking in 2021 and opinions that the increase in corporate value from new businesses such as fintech and webtoons had already been reflected in the stock price also contributed to the decline.

Researcher Cho said, "However, NAVER should not be viewed negatively," and pointed out, "First, from a performance perspective, due to the lock-in nature of internet services once used, the possibility of a sharp decline in the increased revenue growth rate as social distancing eases is low. In fact, although 2021 saw a high revenue growth rate, operating profit growth was only 9.1% because costs such as labor expenses also increased significantly."

This year, the burden of costs is expected to ease, and profit growth is projected to rise again to 19.1%. Researcher Cho said, "In new businesses, the metaverse platform Zepeto has surpassed 300 million subscribers," adding, "With 95% of users overseas and companies actively using Zepeto as a metaverse platform, it is expected to be a favorable service for future growth and profit generation."

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