[Click eStock] "NAVER, Expected to Expand Commerce Market Share This Year... Target Price Up"

Sangsangin Securities analyzed on the 13th that NAVER's market share in advertising and commerce is expected to expand this year. The investment rating was maintained as 'Buy,' and the target price was raised to 270,000 KRW.

Sangsangin Securities forecasted that NAVER's sales and operating profit for the fourth quarter of last year would reach 2.77 trillion KRW and 528.3 billion KRW, respectively, representing increases of 9% and 30% compared to the same period last year. Seungho Choi, a researcher at Sangsangin Securities, said, "We expect consensus to be met," adding, "Due to the expansion of commerce promotions and the rise in stock price, stock compensation costs are expected to increase by about 10 billion KRW, so the profit margin itself is expected to slightly decrease."

He explained, "Commerce is expected to increase by 13% year-on-year to 746.1 billion KRW," and added, "More importantly, we are paying attention to the significant increase in the average daily number of subscribers after the Netflix partnership. Since this continued along with promotions in the fourth quarter of last year, the profit margin will slightly decrease, but growth in Gross Merchandise Volume (GMV) is expected."

Sangsangin Securities identified the expansion of domestic market share as NAVER's key theme for this year. He said, "Advertising is expected to grow through homepage feed reorganization, AD BOOST, and the launch of AI briefing," and added, "Commerce is expected to achieve growth through the separation of the Plus Store into a standalone app and a major service overhaul."

He emphasized, "The core of the commerce overhaul is the standalone app and direct logistics contracts. The standalone app is expected in the first half of the year, and direct contracts in the second half," adding, "Although profit margins may slightly deteriorate due to increased indirect costs from direct logistics contracts and aggressive promotions, in the current competition for market share expansion, GMV growth is more important than profit margins."

Researcher Choi forecasted, "There are question marks regarding additional growth in new industries, but at least the domestic market share is expected to recover in both advertising and commerce this year."