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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] On the 27th, Hanwha Investment & Securities projected that Naver's operating profit for the third quarter of this year would exceed market consensus. The firm maintained its "Buy" rating with a target price of KRW 240,000.
Hanwha stated, "Naver's Q3 operating profit is expected to grow by 34%, with the operating profit margin reaching 19.3%. The company's core businesses, which have demonstrated stability, should continue to support its stock price."
For Q3, Naver is expected to post revenues of KRW 2.65 trillion and an operating profit of KRW 509.9 billion, surpassing the consensus by 6%. Search ads (SA) and display ads (DA) are projected to grow by 6.6% and 13.7% year-on-year, respectively, while commerce revenue is expected to increase by 11.4%. Content revenue, driven by webtoon marketing, is forecasted to grow by 2.1%.
The report highlighted that the key issue is how low Naver's valuation can go, noting that "the current market cap of KRW 27 trillion equates to a P/E ratio of 12x based on search/commerce earnings alone, which is a reasonable level even considering the local nature of its business."
Hanwha further added, "If unexpected positive developments occur, the stock could gain significant momentum." The firm also mentioned that Naver's stock has been trending downward due to interest rates and weak advertising sentiment but expects revisions in overly conservative forecasts for the second half of this year and 2024 with upward earnings adjustments for Q3.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
