Yuanta Securities noted that there is still potential for a rise in Naver's stock price. It raised its target price from the previous 240,000 won to 290,000 won, and suggested a 'buy' investment opinion. On the 17th, Naver's closing price was 209,500 won.
On the 18th, Lee Chang-young of Yuanta Securities explained, “We raised the target price reflecting next year's earnings, the rise in the stock price of its subsidiary Line Yahoo, and the share buyback (1.46%)”. He remarked, “Despite the recent rise in stock prices, the decline in multiples (corporate valuation ratio) for the fourth quarter's earnings and growth concerns has already been sufficiently reflected.”
User-generated content (UGC) is a strength of Naver. According to a survey conducted by the panel research firm Open Survey in February, the service most frequently used when people have questions is 'Naver' (77.4%).
The Research Institute noted, “The share of the MZ generation among Naver Blog users has expanded to 64% of all users,” and “The monthly active users (MAU) of Chizijik, a representative young content (e-sports), have also reached 2.5 million.” Additionally, the share of visitors aged 10 to 30 on the homepage is nearing 40%.
He stated, “The proportion of young users on the Naver platform is increasing,” adding, “Unlike Google, Naver's search service is centered on data from its UGC sources, such as blogs and clips, which leads to an improvement in search service quality.” He also forecasted that this could contribute to the increase in search revenue, which is Naver's main revenue source.
There are also positive expectations for the future. The Research Institute said, “Strong performance in the advertising sector is expected in the fourth quarter,” noting that while webtoon entertainment has faced a sharp decline in stock prices, it will continue to show double-digit growth of 10.3% to 13.3% in the fourth quarter, following a 13.5% growth in the third quarter.”
He added, “While Posimark is expected to experience temporary revenue slowdown due to a reduction in transaction fees (from $20 to $5.99) aimed at increasing transaction volume, long-term growth is anticipated in the current high inflation situation in the U.S.”