[Click e-Stock] "NHN Expected to Turn a Profit in Cloud Division"

Heungkuk Securities Initiates Coverage on NHN
with Target Price Set at 50,000 Won

On June 2, Heungkuk Securities announced that it has initiated coverage on NHN, presenting a target price of 50,000 won and a 'Buy' investment rating, citing expectations for profit growth in the company’s cloud division.

Ji Won Song, a researcher at Heungkuk Securities, stated, "Through robust growth in the cloud segment, this year, the technology division is expected to add to its stable existing revenue base—public and private cloud service providers (CSP), infrastructure as a service (IaaS), and the Gwangju National AI Data Center GPU business—with new revenue streams such as the Yangpyeong region B200 GPUaaS (GPU as a Service), the Krafton B300 cluster, and sales for VesselAI." He added, "With this, the company is likely to achieve nearly 20% annual top-line growth and turn a profit in its technology division."

NHN Cloud provides a range of cloud services—including IaaS for public and private sectors, platform as a service (PaaS), and software as a service (SaaS). In particular, revenue from the Yangpyeong region’s water-cooled AI data center, which began operations at the end of March, is expected to be fully recognized starting in the second quarter. Song explained, "This revenue alone is anticipated to drive approximately 300 billion won in revenue growth over five years, and considering that about 60% of the total 7,656 GPUs has already achieved around 80% of the existing revenue guidance, there is additional upside potential from future sales of remaining capacity and increases in unit prices."

The game division, which accounts for 19% of the entire company, is also expected to benefit as regulations on web board games are eased. NHN develops and publishes web board game series such as 'Hangame Poker,' 'Hangame GoStop,' and 'Hangame Royal Hold'em,' as well as Japanese mobile games. Song noted, "Given that game revenue grew by 10% year-on-year in 2022, when web board game regulations were first relaxed, we expect at least 8% annual growth this year as well."

The payment division is also solidifying its position as the number one electronic payment gateway (PG) provider in Korea. The total transaction volume in the first quarter was 14.4 trillion won, a 21% increase compared to the same period last year, and the company has also been selected as the payment infrastructure provider for vehicle sales by Tesla and Mercedes-Benz Korea.

Heungkuk Securities forecasts NHN’s annual consolidated revenue for this year at 2.516 trillion won, with the breakdown by division as follows: game 479 billion won, payment 1.273 trillion won, and technology 46 billion won.

This content was produced with the assistance of AI translation services.