"Naver-Dunamu Stock Swap Set to Be a Game Changer"

Analysts have suggested that a comprehensive stock swap between Naver Financial and Dunamu, if realized, would have a positive impact on Naver's corporate value.

On September 26, Ahn Jaemin, a researcher at NH Investment & Securities, stated in a report, "Naver Financial is expected to improve its profit and loss, and beyond its payment business, it can expand into a new business as a cryptocurrency exchange." He added, "With an active entry into the stablecoin business now possible, not only Naver Financial but also Naver as a whole is expected to see an increase in corporate value."

The previous day, reports emerged that Naver plans to carry out a comprehensive stock swap through its fintech (finance + technology) subsidiary, Naver Financial, to make Dunamu a wholly owned subsidiary. Following the news, Naver's stock price surged by more than 11 percent.

Dunamu operates Upbit, the largest virtual asset exchange in South Korea. Industry observers predict that the combination of Naver Financial, which handles annual payments of 80 trillion won, and Dunamu, which operates Upbit-the top exchange in Korea and fourth globally-will trigger a seismic shift in the domestic digital industry.

Ahn noted, "Naver Financial is an unlisted company, and since the stock swap ratio and other details have not been disclosed, there is still a lot of uncertainty. However, Dunamu's corporate value, currently traded over-the-counter, is estimated at 10.7 trillion won. Considering the corporate value of Kakao Pay, Naver Financial's market capitalization is estimated at about 13.6 trillion won."

Ahn explained that if Dunamu's operating profit, which is larger than that of Naver Financial, and a management premium are recognized, Dunamu could be valued at 14 trillion won-reflecting a 30 percent premium on its current over-the-counter market capitalization.

Ahn further stated, "In this scenario, Naver is expected to hold a 37.9 percent stake in the merged entity valued at 28.5 trillion won. The fact that all of Dunamu's current operating profit could be consolidated into Naver's financial statements as a result of this stock swap would also have a positive effect on the stock price."

Last year, Dunamu recorded 1.73 trillion won in revenue, 1.19 trillion won in operating profit, and 983.7 billion won in net income. During the same period, Naver Financial posted 1.65 trillion won in revenue, 103.5 billion won in operating profit, and 162.3 billion won in net income.