[Click eStock] "Eastsoft Needs Reassessment as an AI Company"

[Asia Economy Reporter Hyunseok Yoo] NH Investment & Securities analyzed Eastsoft on the 23rd, stating that it needs to be re-evaluated as an artificial intelligence (AI) service company. No investment opinion or target price was provided.

NH Investment & Securities forecasted that Eastsoft will continue its growth this year by recording favorable results in the gaming and software sectors. The expected sales and operating profit for this year are 99.4 billion KRW and 9.7 billion KRW, respectively, representing increases of 18.8% and 65.6% compared to the previous year.

Researcher Kyunggeun Kang of NH Investment & Securities explained, "Sales from licenses of Alyac and Altools and partnership advertising revenue are expected to increase," adding, "In the gaming sector, the momentum from the launch of Cabal Mobile in the Philippines remains valid; in Thailand, it ranked first among popular games on the App Store just one day after release and has maintained a top 5 ranking for several months."

He emphasized the need to pay attention to Eastsoft's AI service sector. The company established AI Plus Lab in 2017 and has since been conducting research and development in the fields of Virtual Human, Commerce, Techfin, and Security. He said, "They have secured core technology for producing 'Virtual Human' based on AI voice and video learning technology," explaining, "This technology creates videos that speak naturally like a human with only text input. Currently, they are developing an AI instructor in collaboration with Hunet, and plan to expand this technology to various fields beyond education in the future."

Additionally, the subsidiary DeepEye launched the eyewear shopping platform ‘ROUNZ,’ which combines AI and AR technologies. He emphasized, "ROUNZ is the first in Korea to develop an eyewear virtual fitting service by combining deep learning-based facial recognition technology and 3D rendering technology," adding, "At the end of 2019, it attracted 5 billion KRW in Series A investment, and its technological capabilities were recognized as it was selected as Apple’s representative AR service."

He stressed that Eastsoft requires re-evaluation. He said, "Considering that the equity value of the listed subsidiary Zoom Internet (with a 52% stake) amounts to 94.7 billion KRW, while the current market capitalization is 169.7 billion KRW, there is a lack of fair valuation for Eastsoft’s software, gaming, and DeepEye businesses." He added, "If you are looking for AI-related investment destinations with a stable business structure and sound financial health, this is a company to watch."