[Click eStock] "DearU Sees Boost from New Artist Onboarding... Target Price Raised"

On July 16, Hanwha Investment & Securities projected that DearU is likely to see improved earnings in the second quarter of this year, driven by an increase in subscribers due to the onboarding of new artists. Accordingly, the firm raised its target price to 75,000 won.

Park Sooyoung, an analyst at Hanwha Investment & Securities, stated, "In the second half of the year, we expect several factors to act as effective growth momentum for the stock price, including the launch of the in-app service on QQ Music, reduced payment fees following the introduction of PG payment, and subscriber growth resulting from the onboarding of new artists."

For the second quarter of this year, DearU's revenue and operating profit are estimated at 20.6 billion won and 7.7 billion won, respectively, which are in line with market expectations for operating profit. Notably, the average number of Bubble subscribers in the second quarter was approximately 2.2 million, representing an increase of about 17% quarter-on-quarter, following the onboarding of new artists such as NCT Wish and RIIZE at the end of April.

Park explained, "At the end of June, Bubble launched as an in-app service on QQ Music, starting with artists from SM Entertainment. The monthly subscription fee has been set at around 27 yuan (5,300 won). The impact of the QQ Music in-app launch is expected to be reflected in third-quarter earnings."

DearU is also anticipating initial success in the Chinese market through the 'Super Fans Monetization' strategy adopted by global platform companies. Park commented, "TME is focusing on expanding the number of Super VIP (SVIP) users within QQ Music. The SVIP subscription fee is five times higher than the regular premium subscription, and as of the end of the third quarter last year, the number of SVIP subscribers was about 10 million, slightly exceeding 8% of all paying users."

In particular, Park noted, "Since the launch of the Bubble service on QQ Music, TME has been promoting SVIP subscriptions through promotions such as offering a one-month Bubble pass with SVIP sign-up. DearU's entry into China is also expected to achieve steady initial results."

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