[Click eStock] "Digital Daesung, Expectations from e-Learning Division Growth and New Business Expansion"

[Asia Economy Reporter Eunmo Koo] Digital Daesung is expected to achieve both external growth and profitability improvement this year due to the steady increase in members of its e-learning division and the rise in ASP.

With the recent trend of expanding the regular admission rate (up to 40% by 2022), demand for online lectures is also rising. In particular, the presence of star instructors has become a key criterion for students when choosing internet lectures, leading demand to concentrate on the top two companies with the most star instructors (Megastudy and Digital Daesung). As of early this year, Digital Daesung has 7 star instructors (compared to 9 at its top competitor) and is expected to directly benefit from the increased demand for internet lectures in 2021 as well.

On the 7th, Min-Gu Jeong, a researcher at Hana Financial Investment, stated in a report, “Digital Daesung, which has secured a stable market share, has been continuously raising tuition fees since 2019,” and forecasted, “Reflecting the effect of tuition fee increases this year, the e-learning division is expected to achieve a record-high profit margin of 15.5%, up 4.8 percentage points from the previous year.” He also estimated that Digital Daesung’s e-learning division sales will increase by 33.1% from last year to 117.8 billion KRW, and operating profit will rise by 85.7% to 18.2 billion KRW.

Furthermore, it is expected to secure new growth engines through merger and acquisition synergies and entry into new businesses. Digital Daesung is anticipated to achieve continuous growth through business diversification by acquiring and merging with the reading and essay education company Hanwooli and Gangnam Daesung Dormitory Academy. Based on Hanwooli, the market leader in the reading discussion and essay field, Digital Daesung plans to expand into the online reading platform business.

Researcher Jeong predicted, “While Hanwooli was previously an offline and student-centered service, channel expansion (offline → online) and customer base expansion (students → adults) through Digital Daesung’s online education operation know-how will likely lead to solid growth upon future service launches.” In addition, Digital Daesung is expected to continue increasing profitable business units by acquiring Gangnam Daesung Dormitory Academy. The Gangnam Daesung Dormitory Academy is expected to contribute to performance starting this year, and Hanwooli’s online reading club is anticipated to make a full-scale contribution from next year.