[Click e-Stock] "Naver Expected to Grow on New Government Policies"

Domestic Demand Recovery and Expanded AI Investment
Target Price Raised to 270,000 Won

Heungkuk Securities stated on June 11 that it maintains a 'Buy' rating on Naver, raising its target price to 270,000 won. The firm cited expectations for growth driven by the new government's policies to boost domestic demand and expand investment in artificial intelligence (AI).

Kim Jihyun, a researcher at Heungkuk Securities, explained, "Within the government's policy framework aimed at economic recovery, we expect an increase in consumer spending and an improvement in the advertising industry. Based on these favorable conditions, Naver is positioned to expand its growth potential."

For advertising, Kim forecasted growth through the expansion of home feed content placements and diversification of search ad products. Regarding the commerce segment, Kim noted the 1 percentage point increase in commission fees that took effect this month. "Naver still maintains a lower commission structure compared to competitors, so there is potential for further growth through commissions in the long term," Kim analyzed. The new commerce-related service, Naver Plus Store, recorded 7 million cumulative downloads within three months of its launch in March. Kim assessed, "AI-based personalized recommendations and tailored promotions are driving high customer retention, and Naver stands to benefit in the current phase of revitalized domestic consumption."

Kim also viewed the expansion of AI investment as a positive factor. "While Naver's HyperCLOVA model shows some differences in performance compared to major global models, the company possesses technological strength and a self-sustaining AI ecosystem, making it an essential core partner for national AI development projects," Kim pointed out. "Given that the new government's policy focuses on growth through AI transformation, Naver's position within the domestic AI ecosystem will expand." Kim added, "Naver is forming a consortium with Samsung SDS for the National AI Computing Center, and the company's role will grow not only in AI software but also in AI infrastructure policy."

Heungkuk Securities presented Naver as its top pick within the sector. The firm explained the reason for the target price increase as "a slight upward revision in profit estimates and a rise in the price-earnings ratios (PER) of comparable global companies." Heungkuk Securities further noted, "Previously, market skepticism about Naver's AI capabilities led to valuation concerns compared to global peers, but as national policy now focuses on AI investment, the likelihood of further advancement in Naver's AI models and infrastructure has increased."