[Click eStock] "DearU, Concert Resumption and China Expansion... Expecting Profitability Increase"

[Asia Economy Reporter Lee Jung-yoon] Kiwoom Securities predicted on the 7th that DearU's subscriber count will increase due to strengthened fandom from concert resumptions and expansion into China.

DearU's revenue last year reached 40 billion KRW, a 207% increase compared to the previous year, and operating profit turned positive at 13.2 billion KRW. This represents a 35% growth year-over-year, achieved based on 1.2 million subscriptions last year.

Currently, DearU's Bubble service, which charges a monthly subscription fee of 4,500 KRW per individual and offers discounts for multiple subscriptions of two or more, is estimated to have 800,000 subscribers and over 1.3 million subscriptions. Analyst Lee Nam-soo of Kiwoom Securities explained, "With an average subscription retention rate exceeding 90% and an average of more than 1.7 subscriptions per person, we believe there is sufficient leverage potential from subscriber acquisition."

He added, "In the fourth quarter of last year, revenue was 10.9 billion KRW and operating profit was 2.4 billion KRW. Although one-time expenses related to the listing caused a slight dip in operating profit margin, the structure has minimal cost issues aside from agency and app payment fees linked to revenue. We expect a rapid recovery starting from the first quarter after removing one-time factors."

The analyst anticipated that DearU will see an increase in subscribers as fandom strengthens with concert resumptions following the reopening, and as celebrities from various fields join the platform. Celebrities on DearU include K-Pop artists, sports figures, and influencers, with the current number totaling 267.

At the end of last year, DearU's domestic and overseas proportions were 28% and 72%, respectively. It is expected to accelerate globalization by entering the Chinese Android market. China, accounting for 20% of the share, recorded about 150,000 fans based solely on the iPhone operating system (iOS) fandom. Considering the Chinese Android share, it is analyzed that new subscriptions will be two to three times higher than existing iOS subscribers.

Lee said, "The increase in Android users is expected to improve profitability due to discounted Google app payment fees," adding, "To enhance average revenue per user (ARPU) and user engagement, we plan to open MyHome in the second quarter and Live in the third quarter, attempting to expand content categories." He further stated, "Bubble Live, which will add a fan gift feature, along with digital items in MyHome, is expected to improve the top-line structure of the subscription fee business."

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