[Click eStock] "NHN to Accelerate Cloud Revenue Growth... Target Price Raised"

Korea Investment & Securities Raises NHN Target Price to 56,000 Won

Korea Investment & Securities announced on July 13 that it has raised its target price for NHN from 45,000 won to 56,000 won, maintaining its 'Buy' investment rating. This decision is based on the expansion of NHN's cloud business revenue and the outlook for earnings growth this year.

While NHN is not a large-scale player, it has been conducting cloud business for both public and private sectors over an extended period. Last year, the company participated in the government's first GPU procurement project and established an AI-dedicated data center in Yangpyeong with approximately 7,600 GPUs, which began operations in the second quarter.

Jung Hoyoon, a researcher at Korea Investment & Securities, stated, "The Yangpyeong data center is expected to generate over 300 billion won in revenue over five years and will be reflected in NHN’s earnings starting from the second quarter." He also commented, "Drawing on its experience operating the Gwangju National AI Data Center, the company is expanding its cloud business by offering not only GPUs but also services such as GPU management and AI development platforms at the infrastructure layer to enable efficient AI operations. NHN is increasing its orders for public and private GPU clusters and will continue to grow its cloud business."

Korea Investment & Securities also forecasts that NHN will continue its earnings growth this year. Jung noted, "Although the commerce, easy payment, and cloud divisions have continued to post losses, profitability has shown a clear improvement since last year through cost optimization and restructuring processes."

This year, the company expects profits to increase further, driven by regulatory easing on web board games, launches of new mobile games, and new revenue streams from the cloud division. Korea Investment & Securities estimates NHN’s revenue and operating profit this year at 2.94 trillion won (up 17.1% year-on-year) and 175.9 billion won (up 32.8%), respectively.

Jung also remarked, "Among small- and mid-sized data center operators, NHN is building a track record in both public and private sectors, expanding its revenue, and its current valuation is not overly burdensome."

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