[‘\n’, “Stocks will rise once external variables improve”
Some cautious stance towards suggestions for additional growth plans
Mixed views on the outlook for Line-Yahoo stake sale,
NAVER headquarters in Seongnam, Gyeonggi Province. / Photo = NAVER,
, ‘As NAVER announced strong first-quarter results, securities firms are praising its cost efficiency strategy. Some predict that the stock price will rise with improved external variables such as increased business competitiveness in the main industry. However, there are also opinions that simply controlling costs will not lead to a rise in stock price. There are conflicting views on the outlook for the Line-Yahoo stake sale.’,
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, ‘According to the Financial Supervisory Service’s electronic disclosure system on the 7th, NAVER’s operating profit for the first quarter increased by 32.9% year-on-year to 439.3 billion won. The quarterly operating profit reached an all-time high. It surpassed the market consensus of 389.5 billion won. During the same period, the revenue was 2.5261 trillion won, a 10.8% increase. The operating profit margin is at 17.4%.’,
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, ‘By business segment, the revenues were 905.4 billion won for the search platform, 703.4 billion won for e-commerce, 353.9 billion won for fintech, 446.3 billion won for contents, and 117.0 billion won for cloud. The search platform, e-commerce, and fintech recorded profits of 507.1 billion won, 26.1 billion won, respectively. The contents and cloud segments posted losses of 9.7 billion won and 67.2 billion won.’,
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, ‘Regarding NAVER’s performance, Ahn Jae-min, a researcher at NH Investment & Securities, commented, “While the economy is not recovering, the advertising business is picking up with the homepage revamp.” He also noted that “Brand store and guaranteed delivery billing system have gained traction, leading to substantial growth in the e-commerce sector, and the AI business is gradually showing results in neuro cloud sales.” NH Investment & Securities named NAVER the most preferred stock in the industry and maintained a target price of 285,000 won.’,
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, ‘Analysis suggests that strong performance will continue in the second quarter as well. Lee Chang-young, a researcher at Yuanta Securities, stated, “The second quarter is the peak season for advertising, so related revenue is expected to increase.” He also explained, “The NAVER e-commerce sector is expected to be less affected by Chinese e-commerce, and the cost-efficiency trend is being maintained, which is expected to lead to an improvement in operating profit margin until the second half of the year.”‘,
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NAVER logo,
, ‘However, there are opinions that to boost NAVER’s stock price, a growth plan through new business ventures must be presented. This is because simply controlling costs may not lead to a high enterprise value multiple. Kang Seok-o, a researcher at Shinhan Investment & Securities, stated, “Looking at the stock prices of Alibaba and Pinduoduo, it is difficult to assign a high multiple to the results of comprehensive shopping malls.” He further explained, “It is likely to be difficult for the stock price trend to reverse solely through cost control, and the recent price increase limits additional momentum.” The securities firm maintains a neutral investment opinion on NAVER with a target price of 200,000 won. NAVER’s closing price on the 3rd was 194,600 won.’,
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, ‘Recently, the Japanese government demanded a review of the capital relationship between Line-Yahoo and a separation of security systems from NAVER. Line-Yahoo is a comprehensive internet service company formed by the merger of NAVER’s Line and SoftBank’s Yahoo. NAVER and Japan’s SoftBank each hold 50% of the stake in Line-Yahoo’s parent company, A Holdings. With pressure on NAVER to sell its stake, there is increased business uncertainty.’,
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, ‘Outlooks on whether to sell the stake are conflicting. NH Investment & Securities sees a high possibility of NAVER partially selling its stake and becoming the second-largest shareholder. Researcher Ahn Jae-min said, “The value of NAVER’s stake is about 8 trillion won, so it is financially burdensome for SoftBank to acquire it all.” He added, “Given the interconnectedness of NAVER’s operations in Taiwan, Thailand, LINE MANGA, and NAVER JET, a complete sale is not easy.”‘,
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, ‘He also stated, “NAVER is likely to proceed with partial stake sale to maintain its business relationship with Line-Yahoo.” He believes that “The cash obtained from the stake sale can be used for stock buybacks, dividends, or mergers and acquisitions (M&A), which is positive.”‘,
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, ‘On the contrary, some analysts suggest that there is a low likelihood of NAVER selling its stake due to the potential diplomatic friction between Korea and Japan. Choi Seung-ho, a researcher at Imaginary Securities, said, “The administrative guidance document from the Japanese government only mentions a ‘reassessment of the relationship’ and does not mention a sale.” He predicted that “The issue will be resolved in the context of separating Line-Yahoo’s security systems, resulting in no sale.”‘,
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