[Click eStock] "DearU, Profit Margin Expected to Rise Next Year... Continued Increase in Subscription Numbers"

Korea Investment & Securities stated on the 18th that the plans previously announced for DearU are gradually becoming visible, and they expect a positive stock price trend.

Andoyoung Ahn, a researcher at Korea Investment & Securities, explained, "The Bubble Japan service will launch in three months and will be operated through a joint venture (JV) with M-UP Holdings, a Japanese fan platform operator. DearU will recognize royalty revenue and equity-method income," adding, "M-UP Holdings owns over 300 IPs (intellectual properties), and the number of paid fan club subscribers is about 2.5 million, which is more than the number of DearU Bubble subscriptions."

He continued, "We forecast over 2 million subscriptions. In Japan, there is a low psychological barrier to paid communication and paid content. Unlike group-based fan clubs, Bubble is a member-based service, so one user subscribes to multiple members," and said, "Royalty revenue is revenue without associated costs, so operating profit margin (OPM) is expected to exceed 40% next year."

The number of subscriptions is expected to continue increasing through growth in the existing K-pop sector, expansion of categories, and regional expansion. The fandoms of existing artists such as NCT and Stray Kids are growing, new idol groups are joining, and last week, CJ ENM's ZeroBaseOne, which ranked first in debut first-week sales, joined. Subsequently, new artists from SM, JYP, and Kakao Entertainment, including SM's RISE, are expected to join after their debut.

Furthermore, since the service is not limited to K-pop, expansion into actors, solo singers, sports stars, and other areas is possible. In particular, actors affiliated with Kakao Entertainment, which has an equity relationship, are expected to join. Researcher Ahn analyzed that business expansion plans are underway not only in Japan but also in China and the United States, and if the model is similar to Japan's, profit margins could be even higher.

The third and fourth quarters of this year are expected to see continued subscription growth with the addition of lineups such as ZeroBaseOne. The Japan service launch will also introduce handwritten fonts, paid emoticons, and more this year. Especially, the handwritten font feature, which allows users to see messages in the artist's handwriting, has demand and is expected to lead to an increase in average revenue per user (ARPU) next year.

Researcher Ahn added, "This is a point where previously announced plans are gradually becoming visible, and we expect a positive stock price trend," and said, "Considering the equity-method income from the Japanese JV, the annual net profit for next year is estimated to be about 48 billion KRW."

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