Naver Experiences Some Weakness in Key Search Revenue, but Stabilizes in Market Share

Naver reported slowing underlying fourth-quarter 2022 revenue growth of 12.3% with fourth-quarter operating profit declining by 4.2%, both below our expectations. The key search platform business, which underpins Naver’s narrow moat based on intangible assets and network effect, reported revenue growth of 2.3% year on year in the fourth quarter, which is a slowdown given it reported 8,6% year-on-year growth in the third quarter. Given the lower-than-expected fourth-quarter revenue and profits, we reduced our underlying profit forecasts by around 10% in 2023, but see a recovery in the following years.