[Click e-Stock] "Naver, Commerce Performance Desperately Needed"... Target Price ↓

[Asia Economy Reporter Lee Jung-yoon] Hana Financial Investment downgraded the target price of Naver (NAVER) from 450,000 KRW to 350,000 KRW on the 15th, reflecting the decline in the value of its commerce division. However, the buy rating was maintained.

Last year, Naver lost its position as the largest domestic e-commerce platform to Coupang for the first time. Naver's transaction volume consists of Smart Store and external linkage through price comparison pages. While the monetization method for linked transactions only involves a 2% linkage fee, the internal commerce Smart Store transaction volume has higher monetization potential in the future. The estimated transaction volume of Smart Store last year was 25 trillion KRW, and it is expected to exceed 30 trillion KRW this year.

It is analyzed that Naver Commerce needs new growth drivers. Previously, Naver announced in its Q1 earnings report that transaction volume through new vertical services such as Brand Store, Shopping Live, Grocery Shopping, and Gift Giving grew by 78% compared to the previous year. However, as of Q1, the number of Brand Stores was 771, which is small compared to the 420,000 general stores, so the sales proportion is estimated to be low.

The transaction volume of Cream, Naver’s subsidiary’s eponymous C2C (consumer-to-consumer) platform, amounting to 371.4 billion KRW, was also included in the total commerce transaction volume from Q1. Although Cream’s transaction volume is low compared to the total commerce transaction volume of 9 trillion KRW in Q1, it is expected to record transaction volumes in the trillion KRW range annually this year, supporting the downside of transaction volume.

Yoon Ye-ji, a researcher at Hana Financial Investment, explained, "The key to valuation rerating is expected to be the performance of commerce in Japan," adding, "The Japanese version of Smart Store, 'My Smart Store,' launched through LINE, is currently in beta and recruiting sellers, and the official launch schedule is being coordinated with partners."

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