NAVER
The author is an analyst for NH Investment & Securities. He can be reached at jaemin.ahn@nhqv.com -- Ed.
NAVER’s AI businesses are to kick off in earnest with the unveiling of HyperCLOVA X on Aug 24. Despite competition from global tech giants, we expect NAVER to maintain its leadership in the domestic market. Further market expansion by the firm into Japan and other non-English-speaking countries is also possible.
To maintain leadership in domestic AI market
We maintain a Buy rating and TP of W310,000 on NAVER. In our view, the company’s significant preparations for AI business promise to create robust synergies with its large-scale existing databases. While the global AI market is being driven by overseas big tech firms, NAVER is expected to retain a lead in Korea’s AI arena.
NAVER plans to share its overall roadmap and business model for AI at its DAN 23 Conference on Aug 24. Thanks to the incorporation of large language model (LLM) technology, NAVER’s HyperCLOVA X AI is expected to bring growth for existing businesses (eg, ads, commerce, content) and success for B2B ventures via partnerships with a range of companies. Already-secured partnerships include Socar, Smilegate, and Hancom, as well as a number of startups.
CEO letter to shareholders expresses confidence in AI
Prior to the conference, NAVER’s CEO detailed plans to strengthen the firm’s competitiveness in the generative AI era (referred to as ‘the fourth wave’) in a letter to shareholders. Specifically mentioned were: 1) the maintaining of a competitive edge in foundational technology, advanced search, and other core applications through HyperCLOVA X; 2) the enhancing of business and creative productivity; 3) the provision of customized AI solutions for enterprises; and 4) the arrival of a new generative AI-infused NAVER platform experience. Clear confidence was expressed towards NAVER’s ability to retain its competitiveness even in the AI domain.