Duzon Bizon, Stock Soars on Dual Buying by Foreign and Institutional Investors

29% Increase After 14 Consecutive Trading Days of Net Buying
Expectations for New Business Performance Improvement

[Asia Economy Reporter Park Jihwan] Duzon Bizon has recently shown a clear upward trend in its stock price, supported by simultaneous purchases from foreigners and institutions. The expansion of market share leveraging its unrivaled position as the number one domestic enterprise resource planning (ERP) provider and expectations for improved performance in new businesses appear to have influenced the stock price.

According to the Korea Exchange on the 10th, foreigners and institutions have consecutively purchased Duzon Bizon shares for 14 trading days from the 23rd of last month to the previous day on the KOSPI. They net bought stocks worth 53.4 billion KRW and 52.9 billion KRW, respectively. During this period, Duzon Bizon's stock price rose by 29%.

The recent rise in Duzon Bizon's stock price is interpreted as a recognition that the previous decline was excessive compared to expectations for performance improvement. After reaching a yearly high of 126,500 KRW in September last year, Duzon Bizon's stock price continuously declined, falling to the mid-70,000 KRW range last month. Although earnings growth continued each quarter, it consistently fell short of market expectations. In fact, Duzon Bizon's consolidated operating profit for Q1 this year increased by 7.4% year-on-year but was more than 8% below market expectations. In Q2, operating profit reached 20.4 billion KRW, a 16.2% increase year-on-year, but still fell short of the market expectation of 23.5 billion KRW.

In the securities industry, analyses suggest that Duzon Bizon's dominant position in ERP and cloud businesses, along with the newly launched accounts receivable factoring business, brighten the earnings outlook. The new product ‘Amaranth 10’, which integrates standard ERP and groupware, was launched in May and secured pre-orders worth 10 billion KRW, continuing the positive effects of new product releases. The government's non-face-to-face service voucher support project also began reflecting in earnings from Q2, with the cloud business showing a 60.6% growth rate compared to the same period last year. Park Jongseon, a researcher at Eugene Investment & Securities, predicted, "The application for the non-face-to-face service voucher support project will continue to be reflected in Q3, maintaining earnings growth. Groupware sales are also expected to contribute to earnings growth with a 28.0% increase year-on-year."

Revenue generation through the expansion of the accounts receivable factoring business, which started in July, is also anticipated. Currently, contracts for funding providers worth about 300 billion KRW annually have been signed with Mirae Asset Capital, and contracts with Welcome Financial Group and Korea Investment Savings Bank are also being pursued. Kim Jinwoo, a researcher at KTB Investment & Securities, stated, "The domestic accounts receivable factoring market is in its early stages, and with the Small and Medium Venture Business Department's accounts receivable factoring support project starting next year, the market is expected to blossom in earnest. The effective market size for domestic accounts receivable factoring services is estimated at 249 trillion KRW, and Duzon Bizon, as an early market player, is expected to benefit." He added, "Assuming factoring service sales of 9.4 billion KRW and an operating profit margin (OPM) of 80% next year, the contribution to operating profit in 2022 and 2023 will be 7.1% and 13.4%, respectively, which will be a factor in improving Duzon Bizon's profitability."

This content was produced with the assistance of AI translation services.