Megastudy Education Continues High Growth This Year... Target Price Up 18%

[Asia Economy Reporter Park Jihwan] Shinhan Financial Investment forecasted on the 7th that Megastudy Education, as the undisputed number one company in an oligopolistic market, will benefit the most from market growth. Accordingly, it maintained a 'Buy' investment rating and raised the target price by 17.6% from the previous 51,000 KRW to 60,000 KRW.

Yoon Changmin, a researcher at Shinhan Financial Investment, stated, "We expect sales of 507.5 billion KRW and operating profit of 81.6 billion KRW this year," adding, "These figures represent increases of 18% and 32.9% respectively compared to the previous year."

He analyzed, "The annual growth of online Megapass and the effect of offline academy expansion have been reflected," and noted, "Sales in the elementary and middle school division amount to 81.2 billion KRW, and in the high school online sector, Megapass payment growth is steep not only among third-year high school students and repeaters but also among second- and first-year high school students."

Regarding the expansion of sales among lower-grade students, Researcher Yoon explained, "It is presumed to be due to the increased proportion of regular admissions and changes in the EBS linkage rate (from direct linkage to indirect linkage, 70% to 50%)."

He emphasized, "As the tendency to prepare for the College Scholastic Ability Test (CSAT) earlier has increased compared to before, the growth of Megapass from second- and first-year high school students will continue."

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