By Kwanwoo Jun
Naver's shares rallied Monday on a new, attractive shareholder-return policy, as investors largely shrugged off a weak quarterly net profit report.
The South Korean internet-platform giant climbed as much as 5.3% to 206,500 won, outperforming the benchmark Kospi's 0.8% gain.
The gains came after Naver announced new shareholder-return guidelines for 2023-2025, which Citigroup said will likely increase a proportion of cash dividends for investors in the coming years.
The company said it will pay 15% to 30% of its free cash flows for dividends and cancel a total of 3% of its treasury shares for three years until 2025.
Citi said it prefers Naver to its local internet-platform peer, Kakao, as it maintained its buy rating and KRW280,000 target price on Naver.
Naver's first-quarter net profit fell 71% from a year earlier to KRW43.70 billion ($33.2 million) on weak online advertising sales amid an economic slowdown, missing street views.
However, Naver said its U.S.-based online fashion-reseller affiliate, Poshmark, posted an operating profit for the quarter--much earlier than expected--after its acquisition was completed in January.
Naver also said it will release its own generative artificial-intelligence search engine early this summer.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
05-07-23 2319ET