[Click e-Stock] "NHN's GPU Service Growth in Focus... Target Price Raised"

Web Board Business Value Holds Firm
GPU Service Performance Gains Traction
Second-Quarter Operating Profit Exceeds Market Expectations

There are expectations in the securities industry that NHN will secure new growth engines based on the performance of its Graphics Processing Unit (GPU) service business.

According to Hanwha Investment & Securities on July 9, researcher Kim So-hye commented the previous day, "Even considering only the solid value of NHN's web board business, the current stock price is undervalued," adding, "As the cloud business delivers tangible results, an upward revision in valuation is anticipated." Accordingly, she maintained a 'Buy' investment opinion and raised the target price from 48,000 won to 50,000 won.

NHN's second-quarter sales for this year are estimated at 706.8 billion won, with operating profit reaching 43 billion won, slightly surpassing the operating profit consensus (market expectations). By business segment, PC sales increased by 5.7% from the previous quarter, reflecting the easing of web board regulations. Mobile sales also grew compared to the previous quarter, attributed to the impact of lineup events in Japan.

In particular, technology business sales are estimated to have increased by 12.3% from the previous quarter, driven by the performance of the GPU service business. As a result, the second-quarter operating margin is projected to reach 6.1%.

The cloud subsidiary, which had previously recorded hundreds of billions of won in losses, now has greater potential for external growth and a turnaround in performance. The GPU service business, with its results reflected starting from the second quarter, is cited as a key factor that will improve both scale and profitability in the second half of the year. The cloud subsidiary, which posted a loss of about 20 billion won last year, is expected to reach the breakeven point this year as its related business expands.

Researcher Kim explained, "The web board business will maintain a solid profit level, and the cloud subsidiary will drive a turnaround," and added, "This year, the cloud subsidiary can make a meaningful contribution to the company's overall performance." She also stated, "Among domestic companies offering GPU services, NHN's competitive advantage will lead to a stock price revaluation," maintaining her view that NHN is a top pick among small and mid-cap stocks.

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