Internet giant Naver Corp. has ascended as the most valuable stock in Korea as its global outreach and news of its Japanese unit Line merging with Yahoo Japan made it stand out against the bearish Korean peers and fueled price gain over 40 percent this year.

According to the Korea Exchange on Tuesday, Naver share price multiples against the same Korean stock face value of 5,000 won came to 8.575 million won ($7,228.36) as of Monday, the highest valuation among shares available in Seoul.

Its value had been third after Netmarble and SK until the end of June but jumped to the market No. 1 in early July on expectations for earnings growth for the upcoming quarters, analysts said.

Naver posted an operating profit of 202.1 billion won in the quarter ended September on sales of 1.66 trillion won. Its operating profit jumped 57.5 percent from the previous quarter, marking the first quarterly gain in two years, according to the company.

“With stable growth of advertisement revenue, Naver has been building up content and financial businesses as new growth engines,” said an analyst at Hanwha Investment & Securities.

Investors also were buoyed by the news that Naver’s Japan-focused messenger operator Line Corp. will become one family with Yahoo Japan Corp. to form a dream Asian team against multinational giants on the internet front like Google and Apple as well as Chinese names.

“The engagement with Yahoo Japan will bring synergy in various areas including e-commerce and payment services sectors and help raise the value of Naver by 3 to 4 trillion won worth,” said another analyst at Korea Investment & Securities.

Naver shares have been flying recently on the speculation of a merger and expectations for earnings growth.

On Tuesday, its shares closed 0.29 percent higher at 172,000 won, gaining 41 percent so far this year. The total market capitalization of Naver stood at 28.35 trillion won, the third biggest after Samsung Electronics and SK Hynix on the main Kospi.

Mirae Asset Daewoo recently revised up the company’s stock price target to 241,000 won for the next 12 months, up 40 percent from the current price.

Meanwhile, SK Corp. came second with 6.4 million won in price multiple thanks to its subsidiary SK Biopharmaceuticals, whose sleep disorder drug received positive opinion from the European Medicines Agency`s (EMA) Committee for Medicinal Products for Human Use (CHMP) last month.

Samsung C&T came third with 5.03 million won, NCSoft 4.87 million won, and Netmarble 4.47 million won. Samsung Electronics ranked eighth with 2.52 million won.

By Pulse

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