Naver Sees Foreign and Institutional Investors Return: Is This the Signal for a Rebound?

Stock Drops 25% from Peak Without Major Negative Events
Foreign and Institutional Investors Lead as Top Net Buyers, Driving Share Price Up

After reclaiming its record high earlier this year, Naver's stock, which had since fallen into a slump, is showing signs of recovery. Market observers note that foreign investors, who have been leading the 'Sell Korea' trend for eight consecutive months, are now hitting the 'buy' button on Naver shares, providing upward momentum for the stock.

According to the Korea Exchange on April 23, Naver closed the previous day at 193,700 won, up 3.31%. Foreign investors and institutional investors made net purchases of approximately 14.4 billion won and 13.9 billion won, respectively, driving the stock price higher. While foreign capital has recorded net outflows from Korean equities for eight consecutive months as of last month, Naver ranked fourth in net foreign purchases and third in net institutional purchases on this day. Compared to the annual low of 176,200 won recorded on April 9, the stock has risen by 9%.

Previously, Naver had attracted attention as a beneficiary of the so-called 'Deep Sea Shock' from China, and in February, it reclaimed its 52-week high (235,500 won) on news that founder Lee Haejin, who had stepped back from management, would return to the board after seven years. However, the stock subsequently plunged by about 25% from its peak without any specific negative events, raising concerns among investors. Given that the KOSPI index fell by -9.58% during the same period, the decline in Naver's stock was considered excessive.

In the securities industry, the return of foreign buying and Naver's recent strategic business partnership with Kurly are being cited as catalysts for the stock's rebound. Lee Jieun, a researcher at Daishin Securities, analyzed, "Naver's weakness in fresh food early-morning delivery is expected to be addressed through Kurly's Plus Store joining the platform."

Jung Hoyoon, a researcher at Korea Investment & Securities, stated, "While the domestic e-commerce market growth rate has fallen back to the low single digits this year, food and beverage products continue to maintain double-digit high growth," adding, "This partnership is a win-win for both companies." According to Statistics Korea, last year the domestic fresh food transaction volume reached 47.4 trillion won (up 15% year-on-year), accounting for 18.2% of the total e-commerce market.

Naver, which last year became the first domestic internet platform company to surpass 10 trillion won in annual revenue, is expected to continue its solid earnings growth this year. Choi Seungho, a researcher at DS Investment & Securities, said of Naver, "Among domestic platform companies, Naver has the highest visibility for profit growth and is expected to benefit the most from the commercialization of AI agents in the future." He estimated this year's revenue at 11.9 trillion won (up 11.2% year-on-year) and operating profit at 2.2 trillion won (up 13.1%).

However, the widening gap between domestic and global AI technology remains a challenge for Naver. Choi noted, "While global big tech companies are spending an average of over 40 trillion won annually on capital expenditures (CAPEX) for AI, the combined CAPEX of Naver and Kakao does not exceed 2 trillion won." He added, "Although there are domestic models such as HyperCLOVA X and Kanana that perform well on benchmark tests, given the AI industry's nature of performance being proportional to capital investment, it is unlikely that the gap with global AI can now be closed."