[Click e-Stock] "DearU, Stable Subscription Growth and Profit Improvement Expected"

On the 13th, Samsung Securities maintained a buy rating and a target price of 49,000 KRW for DearU, stating that the number of subscribers will continue to increase steadily along with the growth of the K-pop industry.

DearU's sales for the second quarter of this year are expected to be 18.9 billion KRW, and operating profit is forecasted at 6.7 billion KRW, in line with previous estimates. Furthermore, sales and operating profit are expected to grow significantly, increasing by 62.3% and 92.1% respectively compared to the same period last year.

Minha Choi, a researcher at Samsung Securities, explained, "At the beginning of the year, DearU signed an asset transfer agreement to acquire all IP (intellectual property) contract rights of Universe. From mid-February, artists who were previously serviced on Universe started to join Bubble, resulting in a sequential increase in the number of subscribers. The average number of subscribers in the second quarter is estimated to be around 2.25 million, which is about 200,000 more than the previous quarter."

Although there was a clear effect of inorganic growth due to the Universe asset transfer agreement, it was also confirmed that more than 55% of the net increase in subscribers in the first half of the year came from existing Bubble service artists, moving in line with the growth of the K-pop market. From this year, performance bonuses are recognized on a quarterly basis, but this quarter is expected to see higher labor costs as last year's annual performance bonuses are temporarily reflected. Nevertheless, stable profit improvement is anticipated.

Researcher Choi added, "We plan to launch digital item services such as handwritten notes and emoticons in the second half of the year. With the addition of these supplementary service features, additional revenue generation beyond the existing subscription fees for Bubble services is expected, leading to an increase in average revenue per user (ARPU)."

He continued, "In addition, we are actively pursuing overseas business expansion. The 'Bubble for Japan' service, prepared in collaboration with Japanese fan platform company M-Up Holdings, is targeted for launch within this year. The China business is also under discussion with local partners and preparations are underway, leaving room for additional growth potential," he added.

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