[Click eStock] "AfreecaTV, Disappointing Platform Revenue... Traffic Rebound Expected in Second Half"

[Asia Economy Reporter Lee Jung-yoon] Korea Investment & Securities maintained a buy rating and a target price of 130,000 KRW on AfreecaTV on the 1st, stating that a traffic rebound is expected in the second half of the year.

AfreecaTV's sales in the second quarter of this year recorded 78 billion KRW, up 20.0% year-on-year, and operating profit increased by 7.7% to 23.2 billion KRW. Platform sales amounted to 58.3 billion KRW, up 15.2% year-on-year. The number of paying users (PU) is estimated to be 240,000, down 11.4% year-on-year, while ARPPU (average revenue per paying user) rose 30% to 243,000 KRW, driving sales growth. Advertising revenue was 18.4 billion KRW, up 42.4% year-on-year, with content-type advertising revenue reaching a record high of 12.9 billion KRW.

Operating expenses increased by 26.1% year-on-year to 54.8 billion KRW. The increase in content-type advertising revenue led to higher commission costs, and expenses also rose due to the streaming contract with the professional gaming team SK Telecom T1.

In the second quarter, AfreecaTV's monthly active users (MAU) continued to decline, and unlike the first quarter, PUs also decreased. However, historically, PUs have decreased in the second quarter compared to the previous quarter, and it is judged that the easing of COVID-19 concerns and increased outdoor activities had a greater impact this year. A rebound in MAU and PU is expected in the second half of the year due to events such as the World Cup.

Jung Ho-yoon, a researcher at Korea Investment & Securities, explained, "Demand for content-type advertising is steadily increasing," adding, "Platform advertising is also strengthening advertiser sales, and the launch performance of the new advertising platform AAM is reflected, so significant growth is expected this year as well."

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