Naver, the South Korean internet platform group, is set to release its second-quarter results on Friday. Here are the key details:
Net Profit Forecast
According to a consensus forecast by FactSet, Naver is expected to report a net profit of 257.06 billion won ($201.9 million) for the quarter ended in June. This represents a 40% increase compared to the previous year.
FactSet’s consensus forecast projects Naver’s second-quarter revenue to be KRW2.435 trillion, with an operating profit of KRW366.84 billion.
What to Watch
Recovery in Advertising Markets
Investors will be keeping a close eye on Naver’s ability to achieve solid earnings growth amidst signs of a recovery in South Korean advertising markets. While display-ads growth is expected to be weak for the quarter, Daiwa Capital analysts Thomas Kwon and Joon Lee suggest that sales of search-platform advertisements could still perform well. Moreover, CGS-CIMB analyst Joshua Kim predicts that Naver’s search-platform revenue growth could accelerate in the second half of the year, driven by an increase in spending from local advertisers.
Artificial Intelligence (AI)
Another area of focus will be Naver’s upcoming artificial-intelligence chatbot model, known as HyperCLOVA X, which is scheduled to launch this summer. Naver has positioned itself as a superior alternative to OpenAi’s ChatGPT in Korean-language services. Analysts believe that the success of HyperCLOVA X has the potential to drive Naver’s long-term business growth.