Naver (035420 KP): Buy: Key takeaways from HSBC AI factory virtual series

Research evidence excerpt

Naver (035420 KP): Buy: Key takeaways from HSBC AI factory virtual series

30 June 2026

Equities

Internet Software & Services Naver (035420 KP)

Buy: Key takeaways from HSBC AI factory virtual series Korea

◆ Naver to capture the operational spread by running AI

MAINTAIN BUY

factories, moving away from heavy direct asset ownership

◆ Increasing GPU renting prices amid the supply shortage and TARGET PRICE (KRW) PREVIOUS TARGET (KRW)

targeting multi-year contract customers are key for profitability 400,000 400,000

◆ Maintain Buy with an unchanged target price of KRW400k SHARE PRICE (KRW) UPSIDE/DOWNSIDE

204,000 +96.1%We hosted Naver in our HSBC virtual series: AI Factories on 29 June. Key discussion (as of 29 Jun 2026)

topics were: 1) demand, 2) profitability, 3) funding structure, and 4) competition.

MARKET DATA

Spread-based business model: During the meeting, against the market’s concerns Market cap (KRWbn) 32,005 Free float 58%

about heavy funding costs, given the typical capex of USD50bn to build a 1GW AI Market cap (USDm) 20,848 BBG 035420 KP

3m ADTV (USDm) 299 RIC 035420.KS

data centre (DC), management highlighted that, although AI factories are a capital-

intensive market, the company will operate AI DCs via a special purpose vehicle FINANCIALS AND RATIOS (KRW)

(SPV) owned by financial investors, with Naver funding USD1bn of the initial Year to 12/2025a 12/2026e 12/2027e 12/2028e

HSBC EPS 12,453 13,696 14,952 17,142

USD10bn required for the first phase of 200MW capacity by the end of 2028, rather HSBC EPS (prev) 12,453 13,696 14,952 17,142

than directly owning the assets. So, its business model will be capturing the spread Change (%) 0.0 0.0 0.0 0.0

Consensus EPS 13,436 12,461 14,868 16,757

between customer-facing revenue and operating costs, including lease fees.