[Click eStock] "Naver, Earnings Hit Bottom... Operating Profit Growth Expected Next Year"

[Asia Economy Reporter Hwang Yoon-joo] NH Investment & Securities analyzed on the 8th that a rebound in Naver's advertising and commerce businesses is imminent. The investment opinion 'Buy' and the target price of 270,000 KRW were maintained.

Ahn Jae-min, a researcher at NH Investment & Securities, stated, "Although the growth rates of the search platform and commerce are declining due to the economic slowdown, we see a higher possibility of recovery than further decline."

Researcher Ahn forecasted, "The sales growth of new businesses such as fintech and content remains favorable, and profitability is improving, so the overall operating profit in 2023 is expected to show growth."

Naver plans to launch the 'On-time Delivery Guarantee Service' in December. Through this, it aims to strengthen its fast delivery service. Researcher Ahn assessed, "It is expected to increase transaction volume while narrowing the service gap with competitors," adding, "The cost burden from the launch will not increase significantly, leading to profit growth from sales growth."

Meanwhile, Naver's third-quarter sales amounted to 2.06 trillion KRW, a 19.1% increase compared to last year, while operating profit was 330.2 billion KRW, a 5.6% decrease.

Researcher Ahn commented, "It is encouraging that the operating profit margin of the search platform/commerce business in the third quarter rebounded to 33.9% from the bottom of 33.0% in the second quarter," and evaluated, "They have started controlling membership-related costs, contributing to profitability improvement."

He added, "Although the growth rates of advertising and commerce businesses were sluggish due to increased offline activities and the economic slowdown, operating profit margin was maintained at around 16% through marketing cost control."

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