[Click eStock] "AfricATV Advertising Revenue Growth"... Target Price 100,000 Won

[Asia Economy Reporter Ji Yeon-jin] Shinhan Financial Investment announced on the 31st that it is raising the target stock price of AfreecaTV by 5.3% to 100,000 KRW, citing continuous increases in payment rates and platform service sales, and that advertising will grow significantly starting this year.

In the first quarter of this year, sales are expected to decrease by 5.6% from the previous quarter to 56.9 billion KRW, and operating profit is expected to decline by 9% to 15.6 billion KRW. Platform service sales (46.4 billion KRW, +3.5%) are analyzed to be steady. The payment rate continues to rise due to the spread of the sponsorship culture, and the average revenue per paying user (ARPPU) has also increased. Advertising revenue is expected to decrease compared to the previous quarter but is projected to increase by 34.3% compared to the first quarter of last year.

Lee Moon-jong, Senior Researcher at Shinhan Financial Investment, said, "Advertising demand has fully recovered," and added, "Advertising revenue this year is expected to reach 50 billion KRW (+70.2%). With the launch of its own advertising platform AAM in early March, it is expected to accelerate advertising growth in addition to the recovered advertising demand."

The platform offers more than 70 detailed categories and allows BJs to be segmented for selection. It analyzes viewers' reactions in real time. Through machine learning, it plans to advance the analysis of users' advertising responses, and the targeting effect of AAM is expected to become more sophisticated over time.

For the new advertising platform, it takes about one quarter for advertisers to join and measure advertising efficiency. The effects of the AAM launch are expected to appear from the end of the second quarter. Mid-roll ads will also be introduced in live broadcasts within the first half of the year. BJs can choose to broadcast ads during moments when they temporarily leave the screen, and targeted ads will be delivered to viewers. As advertising space expands in the core streaming content, platform advertising growth is expected to begin in earnest.