[Click eStock] "DearU, High Growth Resumes from Q4"

Kiwoom Securities forecasted on the 7th that DearU will show high growth again starting from the fourth quarter of this year.

DearU recorded sales of 20.4 billion KRW and operating profit of 8.4 billion KRW in the third quarter, marking increases of 68% and 99% respectively compared to the same period last year. The average quarterly number of subscribers was 2.3 million, up 56.5% year-on-year, continuing the quarterly growth trend since the start of its business.

Namsoo Lee, a researcher at Kiwoom Securities, explained in a report on the same day, “Margin growth was weak in the second quarter due to the one-time reflection of last year’s incentives, but this year, due to quarterly allocation, there will be no one-time cost factors until the fourth quarter.”

Lee also projected, “The average quarterly number of subscribers in the fourth quarter is expected to increase by 56.0% year-on-year to 2.55 million,” reflecting the results of the September launches of ZeroBaseOne, PlayB, and Mr. Trot 2. ZeroBaseOne, which set a new K-POP record with 1.82 million debut sales, released a comeback album yesterday, so an increase in subscribers due to the new release is expected.”

Additionally, DearU plans to open Bubble Japan targeting Japanese artists in February next year. It will provide the Bubble service solution and receive maintenance royalties through a joint venture established with Japan’s M-UP. Currently, Bubble generates about 1.7 artist subscriptions per subscriber from K-POP fandom royalties. Japan, the birthplace of fandom culture, is expected to record even stronger artist subscription matching.

An increase in performance is also expected due to the launch of new services. Lee said, “The usage fee for the Bubble handwritten font launched on the 3rd is 700 KRW, which is 15% of the existing individual subscription fee of 4,500 KRW,” adding, “TWICE was the first to introduce the handwritten font, and the service will be expanded to artists with large fandoms, so additional ARPU growth is expected with subscriber expansion.”

Furthermore, he noted, “Bubble is being introduced in most areas where fandoms occur, including K-POP artists, trot, virtual idols, actors, sports, and MCN,” and predicted, “Starting with recruiting overseas artists through the Japan JV, the Bubble localization strategy for the Americas, China, and other regions will be further advanced next year.”

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