April 25, 2024

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[THE INVESTOR] Naver’s first-quarter earnings were slow, weighed down by rising operational costs, said Shinhan Investment on April 19, lowering the target price to 1.03 million won (US$965.59) from 1.09 million won.

Its revenue in the period will increase 21.1 percent on-year to 1.3 trillion won while operating profit will slide 2.1 percent to 248.4 billion won, widely missing market consensus, said analyst Lee Mun-jong.

Although revenue will be solid from strong shopping service and IT platforms, costs for developing artificial intelligence, marketing and subsidiary LINE will hike 29.5 percent from the same period last year, according to the analyst. 

The target price has been adjusted to reflect these concerns, but investors should keep their eyes on LINE’s financial service that will be launched soon. Its mid- to long-term growth potential, including cloud service and AI, also are still valid, added the analyst maintaining a “buy” recommendation.

By Hwang You-mee (glamazon@heraldcorp.com)