[Click eStock] "AfreecaTV, Platform and Advertising Revenue Growth... Up 19%"

[Asia Economy Reporter Minji Lee] Korea Investment & Securities maintained a buy rating on AfreecaTV on the 23rd and raised the target price by 19% to 110,000 KRW.

AfreecaTV's first-quarter revenue and operating profit are expected to reach 58.1 billion KRW and 15.3 billion KRW respectively, representing growth of 39% and 89% compared to the same period last year. Due to strong donation economy sales in the first quarter, platform revenue is expected to record 46.5 billion KRW, growing approximately 35% year-over-year. Although advertising revenue declined as the effect of the previous quarter's advertising peak season was removed, overall advertiser demand increased significantly, resulting in an expected 9.8 billion KRW, a 131% increase compared to last year.

Jung Hoyoon, a researcher at Korea Investment & Securities, explained, "The ongoing COVID-19 pandemic since last year has had a positive impact on AfreecaTV's performance," adding, "The improvement in BJ content quality and strengthened bonds between users and BJs over the past few years have also contributed positively."

AfreecaTV's playing users (PU) increased from an average of 200,000 in 2017 to approximately 2.65 million last year. The average revenue per user (ARPU) also rose from 96,578 KRW in 2017 to 155,772 KRW last year. Researcher Jung said, "This trend represents a significant structural change, and the increase in PU and ARPU is expected to continue this year."

Researcher Jung Hoyoon stated, "This year, along with the increase in platform revenue, the launch of new advertising platforms and products will help advertising revenue recover from last year's slump and achieve high growth," adding, "Performance is improving continuously, and the valuation is not at a burdensome level considering growth potential."