[Click eStock] "Naver Changes Business Strategy, Now Is the Opportunity... Target Price Raised"

"Potential for Expansion of AI Infrastructure Customer Base"

On July 14, Korea Investment & Securities raised its target price for Naver from 3.3 million won to 3.6 million won and maintained its "Buy" investment rating.

Ho-yoon Jung, a researcher at Korea Investment & Securities, stated, "Until now, Naver has pursued an asset-light strategy that minimizes direct investment, focusing mainly on its B2C business. However, the company plans to revise its strategy toward expanding revenue and profit through aggressive capital investment, which is a key point."

Previously, during a conference call on June 8, Naver unveiled its blueprint for a new AI data center business. The company announced plans to collaborate with Nvidia to build a 200MW-scale AI factory by 2028 and to establish gigawatt-level infrastructure within five to six years.

Researcher Jung commented, "Naver is expected to develop a business model similar to that of neo-cloud companies. In the long term, the key to the AI infrastructure business for external customers will be the ability to secure a steady supply of high-performance chips and to obtain reliable customers for stable business operations. For the 200MW capacity data center scheduled for completion by 2028, it appears that most customers have already been secured."

He also anticipated a high potential for customer acquisition in the future, in line with industry trends. Jung explained, "Currently, most of the increasing demand for GPUs is coming from hyperscalers and neo-cloud companies that serve foundation model developers as their clients. However, demand for GPUs is becoming more diversified through areas like physical AI and sovereign AI. As the pace of market change accelerates, the number of potential customers for Naver's AI infrastructure is likely to increase."

The target price reflects the present value of the new data center, estimated at 4.5 trillion won, with a 5% progress rate applied as a discount to the company’s valuation. Jung added, "Currently, the market is highly sensitive to uncertainties regarding the new data center, such as the potential for securing long-term customers, methods of financing, and the resulting cash flow. While there is no disagreement regarding the profit-generating potential of the new data center, in order for this to be reflected in the company's valuation, these uncertainties must be resolved and the market must see actual progress in the construction plans."

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