韩国互联网与Naver：一场实体AI的希望交易...最终会怎样？

Min-Joo Kang+852 2123 2644minjoo.kang@bernsteinsg.com Robin Zhu+852 2123 2659robin.zhu@bernsteinsg.com Charles Gou+852 2123 2618charles.gou@bernsteinsg.com Price Target 290,000 KRW 035420.KS Hyrum Caesar+81 3 6777 6979hyrum.caesar@bernsteinsg.com Korea Internet & Naver: A physical AI hope trade... in the end? Thank you, Jensen?Naver has regained investor attention amid rising expectations aroundphysical AI. Recent developments - including a reported meeting between Naver’s founderand Nvidia CEO Jensen Huang, as well as a visit by the Anthropic Claude team to Naver’sheadquarters - have heightened expectations around potential collaborations or newinitiatives. Against this backdrop, Naver’s IR team is set to host a new business initiativebriefing for sell-side analysts and investors on June 8 at 9AM HKT. While the company’sAI strategy and monetization roadmap remain largely unclear, the upcoming event raisesexpectations for more concrete direction and potentially meaningful developments. Close Date5 Jun 2026035420.KS Close Price (KRW)252,000Price Target (KRW)290,000Upside/(Downside)15%52-Week Range307,000/190,800ASIAX1,975.13FYEDecDiv Yield1.0%Market Cap (KRW) (B)39,532.19EV (KRW) (B)36,909.02 A Physical AI hope trade... in the end?Physical AI is increasingly being presented asa new growth pillar for Naver, supported by a plan to secure 60,000 Nvidia GPUs for AIinfrastructure expansion. However, currently discussed monetization remains largelyconceptual, centered on GPUaaS, digital twins, and industrial AI solutions, without enoughoperating detail for investors to underwrite near-term revenue conversion or returns oninvested capital. The issue is not whether physical AI is strategically interesting, but whetherit can become economically meaningful within the forecast horizon. Commerce is improving, but the margin trade-off is real.The commerce share-gain narrative is constructive. The Kurly partnership adds strategic value by broadeningNaver’s product offering in grocery within its shopping ecosystem. However, we believecompensating Kurly by lowering the free delivery threshold to integrate into the Naverecosystem have been pressured margins. As Naver pursues additional partnerships toexpand its commerce ecosystem, this could potentially dilute Naver Platform margins. Declining user sessions and time spent are key concerns.As the incumbent leader inthe Korean search engine market, Naver is facing challenges from shifting user behavior,as reflected in declining user time spent and sessions. The key question for Naver is how itplans to effectively commercialize its AI initiatives. Naver’s decades of search-driven userdata underpin a strong platform layer, but its key challenge is building a more competitiveapplication layer to fully monetize its AI potential. Investment Implications DETAILS Investment Implications Our call on Naver is primarily valuation-driven. The stock has been out of investors’ radar due to a less compelling AI narrativeand ongoing concerns around capital allocation, with the multiple de-rating to c.18x forward PER (vs. c.22x historically in2022-2026) reflecting fears of search disruption. While Naver is pursuing new growth avenues - including fintech and physicalAI in partnership with leading players - a credible and monetizable AI strategy is key to multiple re-rating in our view. We trim2027-2028 EPS by 0-1% on adjustments to non-operating profit. KOREA INTERNET & NAVER: A PHYSICAL AI HOPE TRADE... IN THE END? EXHIBIT 2:We observe a decline in user engagement, asreflected in a decreasing DAU-to-MAU ratio. EXHIBIT 1:Naver has 44 million monthly active users onits search platform in Korea. EXHIBIT 6:We think Naver is losing frequency as usersincreasingly turn to AI for search. EXHIBIT 8:We expect Naver’s digital ad revenue growthto grow mid to high single digits in 2026-2029. EXHIBIT 10:Naver’s commerce segment is set to growmeaningfully as management continues to prioritizeand push the business. EXHIBIT 9:Naver’s commerce GMV growth has beenstrong, driven by management’s continued push in e-commerce. EXHIBIT 13:We model Naver’s net margin to remainaround 15% over the next few years. EXHIBIT 12:Naver’s operating margin to remain around17% level following a weak 2026. EXHIBIT 18:Based on our estimates of CommerceOP/GMV margins, Naver’s margins declined amidintensifying price competition in Korea’s e-commercemarket. EXHIBIT 17:Naver reported a softer Q1 Platform margin,which we view as a strategic trade-off to supportincremental share gains in the e-commerce segment. EXHIBIT 19:Naver’s CapEx began to rise from Q3 2025, with the company guiding for around KRW 1.3tn in CapEx for2026. EXHIBIT 22:Kakao’s greatest strength in AI lies in itsextensive reach to the Korean population throughKakao Talk. We prioritize its application layer overcompetitors. EXHIBIT 23:In the platform layer, where Naver has accumulated valuable user data from its Search service overdecades,