[Click eStock] "AfricacTV Q3 Slump... Growth Potential Confirmed"

On the 1st, Shinhan Investment Corp. stated that "AfreecaTV's third-quarter performance fell short of market expectations," but maintained a target price of 150,000 KRW and a buy rating considering the growth direction.

On the same day, Seong-oh Kang, Senior Researcher at Shinhan Investment Corp., said, "AfreecaTV's third-quarter operating revenue was 87.9 billion KRW, up 7.4% year-on-year, and operating profit was 21.9 billion KRW, up 6% year-on-year. However, this performance fell short of the market consensus operating profit of 23.9 billion KRW."

Advertising revenue was weaker than expected. While the advertising industry downturn had an impact, it is interpreted that game companies conducted significant marketing in the second quarter and adjusted their efforts ahead of the fourth quarter. Platform service revenue remained at a similar level to the previous quarter. Although the total Star Balloon transaction volume increased, the number of partners and Best BJs rose, causing a slight decline in commission fees.

On the cost side, commission fees increased due to the consolidation and inclusion of the digital marketing company CTTD, production costs rose due to the creation of Signature original content, and billing fees increased following changes in One Store's commission rates.

However, Senior Researcher Kang said, "Although there are concerns that AfreecaTV's downturn may be prolonged, the continued growth in the donation economy sector is encouraging," adding, "While net sales were disappointing, BJ activity is increasing, which is expected to contribute to fandom and content expansion in the future." "The donation economy culture faces less resistance among younger generations. As they grow into the main consumer base, the average revenue per paying user (ARPPU) is expected to continue rising, playing a role beyond just a cash cow."

He also said, "Although the advertising business cannot completely avoid economic impacts, the trend of increasing demand for below-the-line (BTL) advertising and the business direction have been reaffirmed, so we believe the investment points remain intact," adding, "In the fourth quarter, content-type advertising revenue is expected to strongly rebound due to game events and new releases. Since the increase in BTL demand is also seen as a global trend, it is expected that references will positively influence overseas expansion next year."

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