"Staying Home Only"... Danawa Shows No Signs of Slowing Growth in the Second Half

[Asia Economy Reporter Hyunseok Yoo] Danawa is expected to continue its performance growth in the second half of the year.

According to the financial investment industry on the 2nd, NH Investment & Securities forecasted that Danawa's Q3 sales and operating profit will be 32.7 billion KRW and 8 billion KRW, respectively, representing increases of 11.6% and 34.5% compared to the same period last year.

Junki Baek, a researcher at NH Investment & Securities, said, "Due to the special demand from increased sales of PCs for remote work and online education, the performance expectations for the second half are somewhat lower compared to the first half," but added, "Recently, Danawa's traffic and growth rates in key categories (such as home appliances) are maintaining a favorable trend."

Additionally, the diversification of items in the shopping sector is also a positive factor. Hongsik Jung, a researcher at Ebest Investment & Securities, emphasized, "The important point is that the business structure, which was focused on PCs and home appliances, is expanding the proportion of general products such as daily necessities to around 30%, indicating ongoing item diversification."

Growth is also appearing in subsidiaries. He explained, "Although there was a one-time sale (to the Army) in Q4 last year, a similar sales level is expected for the entire year this year," and added, "Danawa Computer is expected to achieve more than 50% growth in operating profit compared to the previous year, as it has secured many profitable orders from organizations such as the Public Procurement Service, and the overall industry conditions are favorable."

In particular, the operating leverage effect is expected to fully materialize this year. Researcher Baek evaluated, "Considering that the operating leverage effect is becoming visible, the investment attractiveness remains high," and noted, "Especially, the high growth of high-margin business sectors such as information usage fee sales (big data sales) is also contributing to improving profit margins."

Danawa operates major businesses including computer manufacturing and sales, price comparison services, and online site advertising. It also owns subsidiaries such as Danawa Computer, which manufactures and distributes computers and peripherals, and DP G-Zone, which is responsible for building an e-sports platform (PC cafes).