Mirae Asset Securities logo

A strong buying opportunity

3Q25 review: Strong across the board

For 3Q25, NAVER reported revenue of W3.14tr (+16% YoY; 3% above the consensus) and operating profit of W571bn (+9% YoY; 1% above the consensus). Search platform revenue came in at W1.06tr (+6% YoY), in line with expectations; we expect this result to help ease concerns about slowing growth. Commerce revenue expanded 36% YoY to W985bn (beating expectations by 9%), aided by Smart Store growth (driven by enhanced AI recommendations) and increased take rates. In the content business, revenue increased 10% YoY to W509bn (5% higher than expected), led by the webtoon business, which maintained over 10% YoY growth.

Meanwhile, operating expenses amounted to W2.57tr (+17% YoY), 5% higher than expected.

Improvement across ads, commerce, and content

The search platform business is seeing a turnaround in YoY growth thanks to advancements in AI targeting, while NAVER’s AI-powered AdVoost shopping feature is driving rapid growth in commerce ads. In 3Q25, combined YoY growth for search platform and commerce ads accelerated to 12% (vs. 9% in 2Q25). We expect the commerce unit’s strong growth and market share gains to help lift commerce ad rates.

Content growth is also recovering, driven by the strong performance of the webtoon business. We expect growth to climb back above 10% from 2026, driven by the launch of a new platform in partnership with Disney. We also expect profitability to continue improving on a rising mix of IP-related and ad revenue.

Lift TP to W400,000; maintain Buy

We lift our target price for NAVER to W400,000 (from W340,000), as we revised up our 2026 earnings estimates due to strength across ads, commerce, and content (target P/E unchanged at 29x). We retain the stock as our top pick due to its attractive valuation (2026F P/E of 19x). We believe current levels offer a strong buying opportunity.

The outcome of the M&A deal with Dunamu (operator of Upbit) should be the key determinant of near-term upside. If the deal proceeds without additional cash/treasury stock commitments (to secure a larger stake), any valuation re-rating may be limited. That said, we believe the expected increase in 2026 EPS still justifies the stock’s gains since September. If NAVER decides to secure a 50% stake in the Dunamu merged entity through additional funding, we think P/E could re-rate to around 30x and 2026F EPS could rise more than 20%.