[Click eStock] "Emart to Strengthen Offline Marketing through SK Wyverns Acquisition"

[Asia Economy Reporter Minji Lee] Ebest Investment & Securities forecasted on the 26th that Shinsegae's core affiliate Emart will strengthen marketing centered around baseball stadiums and theme parks following news that it will sign a memorandum of understanding (MOU) with SK Group regarding the sale of SK Wyverns. The investment opinion and target stock price were maintained at Buy and 210,000 KRW, respectively.

SK Wyverns is wholly owned by SK Telecom, and last year recorded annual sales of 56.2 billion KRW and an operating loss of 620 million KRW, turning to a deficit compared to the previous year. The acquisition is under negotiation, and the purchase price has not been disclosed. Considering the value of the Doosan Bears team, it is expected to be around 190.7 billion KRW (market value 37 billion KRW, stadium value 100.9 billion KRW). The Doosan Bears recorded sales of 57.9 billion KRW, operating profit of 3.26 billion KRW, and net income of 990 million KRW last year.

NC Dinos of NCSOFT typically reflect baseball team-related expenses in the fourth quarter. These mainly involve signing bonuses for rookies and foreign players, high-value free agent contracts, and player salary increases. In particular, last year, NC Dinos won their first integrated championship, and expenses of around 10 to 15 billion KRW are expected due to employee incentives and championship bonuses.

Jung Yong-jin, Vice Chairman of Shinsegae Emart, emphasizes offline experience and experiential functions. At the opening ceremony of Starfield Hanam in 2016, Vice Chairman Jung predicted, "In the future, competitors in the distribution industry will be theme parks or baseball stadiums."

Orin A, a researcher at Ebest Investment & Securities, said, "If the acquisition is successful, experiential functions with strengths in offline platforms can be combined with existing Shinsegae Group distribution channels," adding, "The main audience of professional baseball is in their 20s and 30s, and female spectators are also increasing, so it will be possible to target generations that will lead future consumption from a marketing perspective."