[Weekly HOT Stocks] Naver, Unstoppable Stock Price Rise... Strong Q2 Earnings Too

Stock Price Rose 7.12% Over One Week from 24th to 31st Last Month

[Asia Economy Reporter Kum Bo-ryeong] Naver (NAVER) stock price attracted investors' attention by showing an unrelenting upward trend throughout the week.

According to the Korea Exchange on the 2nd, Naver's stock price closed at 301,000 KRW on the 31st of last month. It continued a steady rise over the week from 281,000 KRW on the 24th of last month. On the 27th, it rose to 284,500 KRW, on the 28th to 288,000 KRW, on the 29th to 292,000 KRW, and on the 30th to 294,000 KRW. This represents a 7.12% increase over one week.

Foreign investors also purchased Naver shares. Between the 27th and 31st of last month, foreign investors net bought Naver stocks worth 123.16072 billion KRW. It ranked 4th among the top net purchase stocks by foreign investors. The top three were Samsung Electronics, LG Chem, and Samsung SDI.

Despite the impact of the novel coronavirus disease (COVID-19), Naver showed growth in the second quarter. Naver announced on the 30th of last month that its consolidated operating profit for the second quarter of this year increased by 79.7% year-on-year to 230.6 billion KRW. During the same period, sales increased by 16.7% to 1.9025 trillion KRW.

There was balanced growth across all business sectors. Kim So-hye, a researcher at Hanwha Investment & Securities, explained, "The stronger-than-expected performance was largely contributed by the growth in performance-based advertising revenue, and the smart store shopping transaction amount increased by 64%, significantly exceeding the growth rate of the domestic e-commerce market. The IT platform segment grew by 70.2%, supported by the expansion of Naver Pay transaction volume, which surpassed 6 trillion KRW in quarterly transaction value, and growth in the cloud business. Content sales increased by 58.9%, reflecting the growth in webtoon paying users (PU)."

This growth trend is expected to continue into the second half of the year. In particular, expectations for advertising revenue recovery are high. An Jae-min, a researcher at NH Investment & Securities, said, "The advertising business, which has been rapidly recovering since June, is expected to drive Naver's performance growth in the second half of the year. Business platform sales in the second half of this year are expected to increase by 15.5% year-on-year to 1.69 trillion KRW, and display advertising sales are expected to grow by 17.8% to 382.4 billion KRW, showing a much higher growth rate than in the first half. The growth in search advertising driven by the increasing competitiveness of Naver Shopping and the remarkable growth of performance-based advertising will lead the growth in advertising revenue."