[Click eStock] Kiwoom Securities Maintains Naver Target Price at 240,000 Won

Kiwoom Securities maintained a target price of 240,000 KRW and a buy rating for Naver (NAVER) on the 12th.

The fair value is estimated at 38.7 trillion KRW, calculated by summing the fair values of the search platform and cloud-centered business division at 21.6 trillion KRW, Naver Shopping business division at 6.2 trillion KRW, Naver Financial equity value at 3.7 trillion KRW, Webtoon Entertainment equity value at 1.7 trillion KRW, and LY Corporation equity value at 5.4 trillion KRW.

Naver's advertising business is expected to see a leverage effect on related operating profits as topline growth and cost reduction occur simultaneously, driven by increased engagement based on new services such as Home Feed and Clip, as well as real-time matching and internalization of advertising agency functions through AI integration.

The commerce business revealed various plans to reduce delivery lead times, but these are still considered somewhat passive measures aimed at narrowing the gap with Coupang, which has fulfillment capabilities. It was analyzed that a more proactive strategy is necessary to achieve fundamental transaction volume growth and recovery of shopping advertising revenue.

This requires demand forecasting-based sales prediction and linked inventory management solutions for sellers, as well as providing functions that maximize seller profits through real-time optimal pricing and integrated marketing solutions. By securing third-party sellers to expand product diversity, it is essential to increase target recommendation coverage based on user preferences and purchase history, thereby enhancing purchase satisfaction among consumers with similar purchasing power and locking in consumers through incentives such as economic cost reduction compared to equivalent utility value.

Additionally, in the mid to long term, to respond to the activation of the subscription economy based on prediction and inference across various segments, the company should strengthen strategic partnerships with global big tech and data-based firms in areas that cannot be covered by its own AI competitiveness, and it was judged that related business opportunities should not be missed through this.

Due to steady growth in search platform sales centered on advertising and the resulting operating leverage effect, a steady increase and visibility of quarterly operating profits are expected, and based on this, a gradual increase in corporate value is anticipated in the short term.

Jin-gu Kim, a researcher at Kiwoom Securities, added, "Verification of commerce growth potential is necessary, and strengthening connections to AI-based subscription economy businesses is required, which may act as potential risks and factors limiting the company's valuation."