[Click eStock] Naver Expands Overseas Markets in Q2... "Expecting Increase in Corporate Value"

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[Asia Economy Reporter Myunghwan Lee] Korea Investment & Securities announced on the 5th that it maintains a buy rating and a target price of 450,000 KRW for Naver (NAVER), expecting an increase in corporate value due to the overseas expansion of its major businesses.

Korea Investment & Securities forecasts Naver's sales for the first quarter of this year to be 1.89 trillion KRW, a 26.2% increase compared to the same period last year, and operating profit to be 355.9 billion KRW, up 23.2% year-on-year. This figure is similar to the market consensus operating profit estimate of 358.2 billion KRW. By business segment, search platform sales are expected to continue growing with a 13.4% increase year-on-year to 853.7 billion KRW. Content sales are also projected to maintain high growth in the first quarter, following the previous quarter, with a 69.4% increase year-on-year to 221.6 billion KRW. Commerce sales are expected to be 412.1 billion KRW, showing a growth rate similar to that of the fourth quarter of last year.

With a new leadership system in place, Naver has set expanding overseas performance as a key task for this year. Choi Soo-yeon, Naver's new CEO who took office on the 14th of last month, stated, "We will establish a system to accelerate the growth speed of global business across various business areas." Specifically, Naver is expanding its commerce business overseas by launching its core commerce platform, Smart Store, in Japan and applying shopping-related search technology to Japan's Line Shopping service.

Naver is also actively expanding its webtoon business. It has acquired 'eBook Initiative Japan,' the largest e-book service provider in Japan, to aggressively expand its webtoon business. The Japanese manga market grew 23% year-on-year to 612.6 billion yen in 2020. In particular, the electronic manga market led the overall market growth with a 32% increase. Researcher Jung Ho-yoon of Korea Investment & Securities evaluated, "(Japan) is a land of opportunity for domestic webtoon platforms, and through this acquisition, Naver has secured a favorable position in the competition."

Researcher Jung added, "The regulatory risks that had lowered internet sector valuations since the second half of last year have diminished," and "From this year, the overseas expansion of key businesses such as commerce and webtoon will lead to an increase in corporate value."

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