NH Investment maintains buy rating for Naver

NH Investment & Securities Co. projected Monday that shares of South Korean platform giant Naver Corp. will gain momentum this year on rising demand for artificial intelligence (AI) services.

“Naver is expected to enter a period of upturn this year on the back of improved earnings and AI,” said Ahn Jae-min, an analyst at NH Investment & Securities. “It is also an upside that prices of growth stocks are already responding to the chances of rate cuts.”

Ahn noted that Naver will launch its AI-powered search service Cue: in a mobile app form and will unveil business-to-business (B2B) services such as CLOVA Studio soon.

“This year, AI will become one of the major issues of the IT industry and stock markets,” Ahn said. “In Korea, Naver is judged to be a company that is well-prepared in the AI sector.”

Ahn was also upbeat about Naver’s fourth-quarter earnings.

NH Investment & Securities estimated Naver to have earned 405.4 billion won ($308.5 million) in operating profit in the October-December period, up 20.5 percent from a year ago, on sales of 2.57 trillion won, up 13.3 percent.

“Platform sales saw a modest growth of 1.1 percent from a year ago due to weak display ad sales but commerce sales remained solid thanks to a new billing system,” Ahn said.

NH Investment & Securities maintained its positive outlook on Naver, keeping a price target of 310,000 won and a buy rating.