South Korea’s top web service provider Naver Corp. took a beating as institutional and foreign players dumped its shares for profit-taking on downward revisions for its first-quarter performance from increased marketing and investment expenditures.

Naver shares tumbled 5.9 percent to finish Tuesday at 770,000 won ($673.02). The stock so far this month slipped 9.9 percent. Foreign institutions unloaded more than 20,000 shares, and institutional players 6,000 on Tuesday. As of 2:30 p.m. Wednesday, the stock lost 1.2 percent to 761,000 won.

Their selling has been triggered by downgrades by analysts upon slowdown in revenue of the company’s Japanese subsidiary Line and increased marketing cost.

The market consensus compiled by FnGuide adjusted down first-quarter operating profit guidance to 304.7 billion won from 330 billion won estimated in January.

Naver’s first-quarter revenue on a consolidated basis is estimated at 1.1 trillion won, down 1.4 percent on quarter, said Oh Dong-hwan, a researcher at Samsung Securities. Naver’s advertising revenue has maintained growth on burgeoning e-commerce demand, but Line’s (based on the Korean won) on-quarter revenue growth in the first quarter would have slowed to below 2 percent, he added.

Hong Kong-based investment bank CLSA Ltd. revised down Naver’s first-quarter operating profit from 340.4 billion won to 330 billion won citing increased marketing costs. It also lowered Naver’s full-year 2017 operating profit estimate by 5 percent from 1.6 trillion won to 1.5 trillion won reflecting the company’s pledged aggressive investments in new technologies.

Naver’s first-quarter earnings are expected to come out around April 27 as it usually releases quarterly earnings on Thursday in the final week.

By Lee Yong-gun

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]