[Click eStock] Hangul and Computer Target Price Raised... AI Collaboration with Naver

On the 30th, Eugene Investment & Securities raised the target price of Hancom to 24,000 KRW while maintaining a buy rating.

The basis for the target price calculation applied a 15.6x price-to-earnings ratio (PER), which is a 10% discount from the domestic software industry average PER of 17.4x (including The Zone Bizon, Webcash, Hecto Financial, BusinessOn, and Kukon), to the expected 2023 earnings per share (EPS) of 1,520 KRW. The 10% discount factor reflects concerns about relatively low growth potential and subsidiary performance growth.

Hancom plans to launch 'Hancom Docs AI' for B2C users within the year, incorporating ChatGPT technology. In addition to ChatGPT, they will sequentially apply other AI technologies such as optical character recognition (OCR) AI, document comparison technology, and PDF AI solutions from Kaidan, a Taiwanese global software service company in which they have recently invested.

The company has formed a strategic partnership with Naver Cloud to enter the B2G (public and education) market through Hancom Office equipped with ultra-large-scale AI. Naver Cloud’s 'Hyper CloudX,' scheduled to be unveiled in July, will be applied to Hancom Office for supply to public institutions. Starting with the education and public sectors, they plan to build a next-generation document platform through comprehensive cooperation to establish specialized AI services across various fields such as corporate and finance.

Analyst Park Jong-sun of Eugene Investment & Securities forecasted, "We expect consolidated sales of 41.7 billion KRW and operating profit of 5.2 billion KRW in the first quarter," adding, "While sales are expected to decrease by 14.7% year-on-year, operating profit is projected to increase by 24.6%."