[Click eStock] "Seoul Auction, Clear Earnings Growth... Target Price Up 22%"

[Asia Economy Reporter Park Jihwan] Yuanta Securities stated on the 11th that Seoul Auction recorded an earnings surprise in the first quarter of this year with sales of 17.4 billion KRW and operating profit of 3.2 billion KRW. The firm maintained a 'Buy' investment rating and raised the target price by 22.2% from 18,000 KRW to 22,000 KRW.

Researcher An Juwon of Yuanta Securities said, "Seoul Auction's first-quarter performance showed sales of 17.4 billion KRW, a 154.9% increase year-on-year, and operating profit of 3.2 billion KRW, turning profitable," he explained. By segment, product sales exceeded 10 billion KRW, increasing 112% compared to the previous year, and auction sales also grew 567% year-on-year, reaching 4.2 billion KRW. The number of auctions held in the first quarter totaled 11 (2 offline, 9 online), significantly increasing from the previous year. The booming domestic art market and rising art prices also contributed to the expanded performance.

Following the first-quarter earnings surprise, the growth trend in quarterly performance is expected to strengthen. Researcher An said, "More than 10 auctions are scheduled for the second quarter, and the major auction held in April already showed strong results with a total bid amount of 9.9 billion KRW (bid rate 84%)."

Due to the recent rise in art prices, product sales in the second quarter are also expected to maintain at least the first quarter's level of over 10 billion KRW. An's analysis forecasts this year's expected performance with sales of 72.7 billion KRW, representing a 151.9% growth compared to the previous year. Operating profit is expected to turn positive at 13.3 billion KRW. Product sales are projected at 44 billion KRW, likely achieving the highest sales ever. Auction sales are also revised upward to 16.9 billion KRW, all exceeding previous estimates.

The domestic art auction market is experiencing a boom like never before, driven by its emergence as a financial investment tool, the influx of the millennial generation, and the activation of online auctions. Alongside this, a broad-based rise in art prices is also observed. This is thanks to increased demand across various areas including not only original works but also edition prints, goods, and art toys.

Researcher An emphasized, "The market atmosphere is even better than during the monochrome painting craze from 2014 to 2017," adding, "As Seoul Auction is the only listed art auction company in Korea and the top player, it is expected to benefit the most from market expansion."