[Click eStock] "DearU, Growth Expected with New Store Openings and Service Launches in the Second Half"

[Asia Economy Reporter Lee Jung-yoon] IBK Investment & Securities forecasted on the 31st that DearU is expected to experience external growth due to the addition of new artist intellectual property (IP) and the launch of a Chinese Android application (app), with a notable operating leverage effect from the release of new services.

DearU's sales in the second quarter of this year amounted to 11.6 billion KRW, a 22.8% increase compared to the same period last year, and operating profit was 3.5 billion KRW, up 2.1%.

Researcher Lee Hwan-wook of IBK Investment & Securities explained, "External growth was achieved due to an increase in subscriptions driven by the activities of resident artist IPs. However, operating profit only saw a slight improvement due to fixed cost burdens from employee bonuses and average salary increases." He added, "Net profit reached 4.8 billion KRW, supported by a favorable exchange rate, and as of the first half of this year, the domestic and overseas sales ratio was composed of 69.6% overseas and 30.4% domestic."

The number of IPs currently registered on the Bubble platform is identified as 355. Actor IPs, Mystic Entertainment’s girl group Billlie, Street Woman Fighter dancers Aiki, Monica, Lip J, and others have completed registration. Furthermore, a large-scale new IP registration is scheduled for the second half of this year, and subscription growth is expected to be steeper compared to the first half. JYP’s rookie girl group NMIXX is expected to join within the third quarter, and a boy band will be added in the fourth quarter.

Technology development for entry into the Chinese market has been completed, and market entry is expected within this year. The registration of major overseas POP artists is anticipated to become visible next year.

Additionally, performance improvement is expected to accelerate with the official launch of live services in the second half of the year. A beta version with live features has been opened and technical stabilization is underway. The official version release is considered imminent, and although subscription fees are not expected to increase, average revenue per user (ARPU) is likely to rise through the sale of separate paid products.

DearU’s expected sales for this year are projected to increase by 42.3% year-on-year to 56.9 billion KRW, operating profit to rise by 79.6% to 23.7 billion KRW, and operating profit margin to reach 41.7%. External growth is anticipated from the addition of new IPs under JYP and the launch of the Chinese Android app. The operating leverage effect from new service launches is expected to be prominent, and considering the currently high subscription retention rate of 90% and a monthly subscription fee of around 4,500 KRW, medium- to long-term growth potential is judged to be high.

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