April 20, 2024

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[THE INVESTOR] Naver’s short-term earnings will inevitably be slow, said NH Investment and Securities on July 2, lowering the target price to 900,000 won (US$806) from 1 million won.
 

Both Naver and its affiliate LINE upped their investment in new businesses, slowing down earnings growth and weighing down stock prices, said analyst An Jae-min. Aggressive expansion into new business unavoidably means an increase in marketing costs, so for the time being earnings expectations should be lowered, he said. 

LINE announced its plans to tackle the contents, commerce and financial technology sectors where all global internet companies have paid attention recently, and will need time for the new businesses to be reflected on earnings, according to the analyst. 

Although short-term earnings will slow down for now, it is favorable in that the firm is taking on a challenge for mid- to long-term growth, said An, maintaining a “buy” recommendation. 

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