[Click e-Stock] "Naver Faces Higher Expectations Amid Challenging Market Conditions"

Target Price Lowered from 230,000 Won to 210,000 Won

On April 24, Shinhan Investment Corp. lowered its target price for Naver from 230,000 won to 210,000 won, citing that the contribution of Plus Store to earnings is not meeting market expectations. The investment opinion of "Buy" was maintained.

Naver is expected to report operating revenue of 2.7866 trillion won in the first quarter of this year (up 10.3% year-on-year) and operating profit of 500.9 billion won (up 14%), slightly falling short of market expectations (operating profit of 511.1 billion won). This is attributed to increased marketing expenses before and after the launch of the Plus Store app last month.

Kang Seokoh, a researcher at Shinhan Investment Corp., stated, "The recent share price decline is due to uncertainty over the growth contribution of Plus Store amid sluggish industry conditions." He added, "Plus Store will increase transaction volume starting with high-priced products and loyal users, but the pace of its contribution to earnings will be gradual." He pointed out that, since this is a strategy to advance existing businesses rather than focusing on AI, investors have high expectations for the pace of earnings growth.

Intensifying competition amid challenging advertising and commerce market conditions is also a burden for Naver. Kang noted, "The recovery in growth rate that Naver showed in the second half of last year will become a high base burden in 2025." He also said, "The collaboration with Kurly, which was disclosed through the media, will strengthen Naver's previously weak fresh food segment, but its short-term contribution to transaction volume is expected to be minimal." Additionally, he stated, "Growth rates for webtoons and cloud services are also slowing," and diagnosed, "While Line Manga is achieving outperformance amid stagnant market growth, valuation pressure will persist unless Naver expands into North America and Europe."

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