[Click eStock] "Danawa, Benefiting from E-commerce Market Expansion...Continued Earnings Growth"

[Asia Economy Reporter Park Jihwan] Yuanta Securities stated on the 17th that Danawa is expected to benefit from the expansion of the domestic e-commerce market and is anticipated to continue its performance growth trend.

Researcher Park Jinhyung of Yuanta Securities said, "Danawa is a beneficiary of the e-commerce market, which is currently reaching its largest scale ever," adding, "Through its price comparison business model, it has secured domestic and international e-commerce companies as clients, and it is judged that it can grow alongside the domestic e-commerce market, which has grown 19% in one year." He explained that the increase in the number of e-commerce companies, the expansion of product categories, and the widening price differences between companies will lead to increased demand for price comparison services that allow convenient product information and lowest price searches.

Danawa is a comprehensive shopping platform company specializing in price comparison of various products and services such as PCs and home appliances. Its business model connects consumers and sellers through operating a price comparison platform, generating revenue from brokerage commissions and advertising. It also operates B2B and B2G assembly PC and component manufacturing and distribution businesses. As of last year, the sales composition by business segment was partnership and sales commissions (20%), advertising business (8%), product sales (40%), and merchandise sales (30%).

It is analyzed that traffic increase is expected through the expansion of price comparison categories. The company is expanding its categories from the existing focus on PCs and home appliances to general products such as daily necessities. This is evaluated as a successful establishment of a virtuous cycle structure leading to increased customer traffic from category expansion and increased sales from advertising and information usage fees.

The proportion of general product sales outside PCs and home appliances increased from 15% in 2017 to 27% last year, and during the same period, the average daily traffic increased by 113%. Consequently, partnership shopping, advertising, and information usage fee sales rose by 56%, according to the analysis. Researcher Park Jinhyung said, "Considering that the price comparison categories that can be expanded in the future are limitless, the growth potential is significant."

Danawa's sales and operating profit forecasts for this year are estimated at 249.7 billion KRW and 41.1 billion KRW, respectively, representing increases of 7.6% and 8.9%. It is expected that the performance growth trend will continue with market growth and traffic expansion.

Researcher Park said, "The increase in sales is expected to slow compared to the previous year," explaining, "This is due to the base effect from last year's surge in PC demand caused by the COVID-19 impact and the contraction of the assembly PC market as GPU supply shortages continue due to increased demand for cryptocurrency mining."