Hanwha Investment & Securities said on the 31st that for NHN(181710), the value of its cloud business is being reassessed, narrowing the stock's discount. It kept its investment opinion at "Buy" and raised the target price 33.8% to 87,000 won from 65,000 won. The previous session's closing price was 69,700 won.
Kim So-hye, an analyst at Hanwha Investment & Securities, said, "NHN's share price, which has risen steeply in a short period, appears to be narrowing its discount as the value of the cloud business—previously not fully reflected—is reassessed," adding, "If profitability is confirmed through quarterly results in the second half, the basis for valuing the technology division separately will become even clearer."
According to Hanwha Investment & Securities, NHN currently operates 38 megawatts (MW) of infrastructure centered on Pangyo, Gwangju and Yangpyeong. Of that, about 22 MW is estimated to be generating sales. In the second half of next year, it plans to secure an additional 30 MW through 20 MW of external leases and 10 MW of in-house builds.
Kim said, "The existing graphics processing unit (GPU) infrastructure centered on Yangpyeong has secured an initial utilization rate as a significant portion has been filled by the government's artificial intelligence (AI) computing support program," but added, "For the newly added 30 MW, not only government demand but also the share of commercial demand focused on GPU as a service (GPUaaS) for general corporations and overseas customers is likely to expand."
Kim said, "The earnings contribution from the additional 30 MW will begin in earnest from 2028 rather than next year," and predicted, "With existing government demand supporting the downside of the business, if demand from overseas corporations including Japan and from domestic general corporations fills the new capacity, both sales growth and profitability improvement will appear after 2028."