[Click e-Stock] "NAVER: With Expectations Low, Now Is the Time to Buy"

Target price raised from KRW 270,000 to KRW 310,000

Shinhan Securities raised its target price for NAVER to KRW 310,000 from KRW 270,000 on October 19 and maintained its Buy rating.

Shinhan Securities analyst Ko Junhyuk said of NAVER, "New revenue streams are expected to emerge from AI data centers, while AI agents are expected to expand the revenue base of its existing platform. With expectations currently low, the share price presents a buying opportunity."

The target price increase reflects the delivery of 200 MW under the first phase of the AI Factory plan and a valuation of KRW 5.6 trillion in 2028, disclosed alongside the medium- to long-term plan to reach 1 GW. Ko added, "More specific contract terms with AI data center customers will drive the share price higher."

NAVER's operating revenue this year is forecast to rise 14.9% year on year to KRW 13.8239 trillion, while operating profit is expected to decline 7.2% to KRW 2.0493 trillion. On the deterioration in profitability, Ko said, "The causes are increased commerce promotions and higher costs for installing NAVER Pay Connect terminals. Profitability is expected to normalize in the first quarter of next year as 55 MW comes online and the pace of increase in infrastructure investment costs slows."

He was particularly positive about the potential for NAVER's AI Factory to ease the financial burden faced by existing neocloud companies. Ko said, "NAVER's AI Factory combines its existing cloud-operating capabilities with global capital and equipment supply chains. NVIDIA provides an accelerated computing platform, Brookfield brings infrastructure investment capabilities, and NAVER contributes its experience operating data centers and AI services. Its asset-light structure eases the financial burden faced by global neocloud companies." By leveraging external capital to share direct investment in facilities, NAVER can focus solely on monetizing the business through customer acquisition and operations.

Ko forecast that this business model would translate into actual revenue. He said, "NAVER's revenue is expected to reach KRW 3.9 trillion in 2028, with operating profit of KRW 473.9 billion. Gradual increases in GPU selling prices and cost efficiencies are expected to lift the operating margin from 10.3% in 2027 to 17% in 2031."

There are also expectations that the ecosystem will expand beyond agentic AI to physical AI. Ko said, "NAVER's strength in physical AI lies in its experience integrating and operating spatial mapping, robot control, and cloud services in real-world environments. It has validated the technology by operating around 100 service robots at its 1784 headquarters. The formal delivery service launched last July at Tokyo Midtown Yaesu with Mitsui Fudosan and NTT East is an example of extending its operational experience at its own headquarters to an external commercial facility, demonstrating the potential for business expansion."

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