Kiwoom Securities noted that NAVER will post solid results. It raised its target price from 260,000 won to 270,000 won and issued a 'buy' recommendation. On the 23rd, NAVER's closing price was 204,500 won.
On the 24th, Kim Jin-gu, a Research Institute at Kiwoom Securities, said, "I consider NAVER to be the top pick in the internet and gaming sectors," adding, "NAVER's fair value is 42.7 trillion won." Currently, NAVER's market capitalization is estimated at 32.4 trillion won.
Kiwoom Securities estimated that NAVER's revenue for the fourth quarter of last year will be 2.8 trillion won, with an operating profit of 541.5 billion won. Kim noted, "I anticipate the operating profit margin to be 19.2%," and explained, "The strong performance of the search platform will offset the increasing personnel and marketing expenses, resulting in solid results."
Kiwoom Securities raised the equity value of NAVER's LY Corporation (Line Yahoo) from 6.3 trillion won to 6.8 trillion won. This reflects an increase in the controlling shareholder's equity and takes recent exchange rate fluctuations into account.
Kim noted, "The launch of the U.S. Stargate project has enhanced SoftBank's position," adding, "There's potential for a group-wide umbrella effect regarding its affiliate, LY, and for linkages to artificial intelligence (AI) business efforts."
However, it was noted that the webtoon entertainment business needs margin improvement. Kim said, "There's a necessity to enhance performance contributions from regions including Korea and the West, excluding Japan."
The commerce business is expected to face rising expenses due to expanded membership-related marketing and delivery coverage while narrowing the gap with Coupang. Kim noted, "There will be pressure on the margin rate of this business in the short term," but stressed, "It's important to see if comprehensive investments can drive gross transaction value (GMV)."
He added, "I believe that supporting predictive solutions targeted at third-party sellers, which are core to NAVER's commerce business value, should be prioritized to significantly narrow the gap with Coupang."