[Click eStock] "Emro, Cloud Revenue Growth Expected"

Korea Investment & Securities Report

[Asia Economy Reporter Minji Lee] Korea Investment & Securities expressed on the 10th that Emro's profitability is expected to improve due to increased sales in cloud and data businesses.

Emro, established in 2000, is a supply chain management (SCM) software company that provides solutions to optimize purchasing supply chains and reduce costs. Its revenue consists of system construction services, licenses, technical support, and cloud services. When a client first builds a system, Emro charges service fees and license fees, and annually collects maintenance fees (technical support) amounting to about 18% of the license fees. For the cloud model, it charges cloud setup fees and monthly subscription fees.

Andoyoung, a researcher at Korea Investment & Securities, said, "Emro has secured many large corporations such as Samsung and SK as clients, and as the importance of supply chain management grows, demand for cloud-based products for small and medium-sized enterprises is increasing."

The SCM software market is in an early growth phase compared to ERP and CRM, with significant growth potential. Currently, the domestic penetration rate of SCM software is about 10%, which is very low. The competitiveness of the entire corporate ecosystem linked by supply chains is becoming more important than individual companies,

especially since last year, the digitalization of supply chain management has become essential due to the non-face-to-face purchasing environment caused by the pandemic, and penetration rate increases and market growth are expected. Researcher Andoyoung explained, "The company holds many references from large corporations, making it advantageous to expand clients to vendors and others, and existing large corporate clients are continuously advancing their functions." Emro holds a 40% market share in the SCM software market and is expected to maintain a unique position with 20 years of accumulated references, SCM domain knowledge, and a large volume of purchasing data.

Going forward, Emro is expected to shift from primarily construction-based revenue to cloud-based revenue. The proportion of cloud services is increasing not only among small and medium-sized enterprises but also among large corporate clients. Overseas business expansion is planned for early next year, which is also expected to proceed mainly with cloud services.

Researcher Andoyoung analyzed, "As AI analysis functions such as master data management and demand forecasting are added, usability continues to grow, and the B2B data business is also underway. As sales based on such technologies increase, the proportion of service revenue will decrease, and profitability will improve."

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