[Click eStock] "AfreecaTV, Concerns Over Sponsorship System Disappear"

Shinhan Financial Investment "Raises AfricaTV Target Price from 120,000 KRW to 130,000 KRW"
Introduction of Ad Management Platform AMM Also a Positive Factor

[Asia Economy Reporter Gong Byung-sun] As the sponsorship culture, a source of revenue for AfreecaTV, becomes widespread, concerns about growth have disappeared, according to an analysis. Shinhan Financial Investment raised the target price for AfreecaTV from 120,000 KRW to 130,000 KRW, maintaining a 'Buy' investment rating.

It is analyzed that the sponsorship system has become widespread. Lee Moon-jong, a researcher at Shinhan Financial Investment, said, "It is true that some investors had doubts about the growth of the sponsorship system in platform services over the years," adding, "Now is the time to put those concerns aside." Various communication channels such as YouTube, TikTok, and Clubhouse have already adopted sponsorship systems as business models.

As the sponsorship culture becomes widespread, the payment rate is also increasing. It recorded 4.8% in the first quarter of this year, growing by more than 1 percentage point compared to the same period last year. Improvements in user interface (UI) and other services are further activating user participation. This is expected to help increase the payment rate in the mid to long term.

The introduction of the advertising management platform AMM is also a positive factor. Since the introduction of AMM in March, the number of advertisers and the ratio of direct sales have increased, with growth observed every quarter. The researcher explained, "AfreecaTV's expected advertising revenue this year is 47.9 billion KRW, a 63.2% increase compared to last year," adding, "In the second half of the year, mid-roll ads will be officially introduced in live broadcasts, accelerating advertising growth." Additionally, as the e-sports season resumes, content advertising revenue is also expected to rise. Content advertising revenue for the second quarter of this year is expected to increase by 26% compared to the previous quarter, reaching 6 billion KRW.