[Click eStock] "DearU, External Growth and Profitability Improvement... 2Q Consensus Expected to be Met"

Yuanta Securities on the 21st anticipated that DearU will achieve significant growth in scale and profitability compared to the same period last year, driven by an increase in subscribers and a high subscription retention rate of about 90%, fueled by the expansion of the global K-pop fandom.

DearU's expected sales for the second quarter of this year are 18.3 billion KRW, up 57.1% year-on-year, and operating profit is expected to be 7 billion KRW, a 100.3% increase, generally in line with market consensus estimates. As of the end of June, the number of IPs (intellectual properties) of artists on the platform totaled 523, and the number of subscribers reached 2.25 million, both showing an increasing trend.

Researcher Lee Hwan-wook of Yuanta Securities explained, "While the first half saw a rapid increase in subscriptions due to the transfer of IPs from Universe, in the second half, new IPs from major shareholders are expected to be added continuously." He added, "Following the recent addition of the Chinese boy group Boy Story under JYP, new SM rookie IPs debuting in the third and fourth quarters will also be continuously added within the year, and the addition of actor IPs under Kakao Entertainment is also anticipated."

He continued, "Considering that the global expansion of new fandoms for K-pop artist IPs is progressing smoothly, an increase of about 100,000 subscribers per quarter is expected to be achievable without difficulty," and "Sales of emoticon products within the digital store are scheduled to ramp up in the third quarter, and subscription services such as handwritten fonts related to owned IPs will also be added."

Furthermore, considering the average revenue per user (ARPU) of less than 8,000 KRW per month and a high customer satisfaction level exceeding a 90% subscription retention rate, it is analyzed that price resistance due to service expansion will not be significant.

DearU's expected annual sales for this year are projected at 75.5 billion KRW, up 53.5% year-on-year, operating profit at 28.7 billion KRW, a 76.4% increase, with an operating margin of 38.0%. It is also understood that the launch of a new local platform business in Japan is targeted within the year, and the new platform business in China is progressing rapidly, leading to expectations of further performance improvements.

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