[THE INVESTOR] Shinhan Finance Investment on Sept. 9 said that Naver shares are currently overvalued, predicting the price could decline in the latter half of this year due to slowing earnings of its mobile messenger LINE.

The securities firm said Naver’s market value was priced at 24 trillion won (US$21.81 billion), considering the namesake portal service’ value at 15.3 trillion won and its shares in LINE worth 8.5 trillion won. 

But the figure is more than 20 percent overpriced, the firm said.

Currently, Naver’s price-earnings ratio is 33 times, which compares with 25 times of Facebook.

“If expectations for LINE’s growth are slowed, estimates for Naver earnings next year could be lowered. LINE’s earnings are a crucial factor,” the firm said.

The firm predicted LINE’s revenue next year would increase 4.9 percent to 1.5 trillion won.

By Lee Ji-yoon (jylee@heraldcorp.com)