[Click eStock] "AfreecaTV, Continued Earnings Growth... Target Price Up 18%"

[Asia Economy Reporter Park Jihwan] IBK Investment & Securities maintained a 'Buy' rating on AfreecaTV on the 4th, citing growth trends continuing through platform, advertising, and commerce in the first quarter of this year, and raised the target price by 18.2% from the previous 110,000 KRW to 130,000 KRW.

Researcher Park Yonghee of IBK Investment & Securities stated, "Following the Q1 earnings surprise, profit estimates are rapidly increasing," and explained, "Q1 consolidated revenue is expected to reach 60.9 billion KRW, a 48.2% increase year-over-year." Operating profit also rose 139% to 19.6 billion KRW. These results exceeded initial market expectations by 7.6% in revenue and 28.1% in operating profit.

Looking at each business segment, platform service revenue grew 47.5% year-over-year to 50.9 billion KRW, and advertising revenue doubled to 8.4 billion KRW. Within platform service revenue, donation economy gift revenue reached 48.9 billion KRW, growing 49.5%, continuing high growth following the previous quarter. Researcher Park analyzed, "The increase in Paying Users and the simultaneous rise in average revenue per user (ARPU) were observed."

Platform service revenue is increasingly likely to grow faster than market expectations. Content-type advertising revenue reached 4.8 billion KRW, showing a significant recovery with a 148% increase over one year. Researcher Park emphasized, "Recently, advertisers have diversified to include not only games but also public institutions and sports, raising expectations for unit price and advertiser base expansion."

Revenue from platform advertising due to the AAM launch is expected to grow larger in the second half of the year. With continued launches of major games this year, content-type advertising revenue is also expected to make a significant contribution.

Researcher Park stated, "In the second half of this year, mid-roll ads and commerce platform launches are planned," adding, "In conclusion, advertising revenue is expected to accelerate, and through the launch of the commerce platform, the business model is anticipated to evolve to the next level."