[Click eStock] "AfrikaTV Becomes a Money-Making Platform... Will Keep Running in the Second Half"

Effect of Increased Ad Rates with Advertiser Platform Launch
Continued Video Demand from New Releases and Olympic Broadcasts

[Asia Economy Reporter Minwoo Lee] AfreecaTV posted strong earnings in the second quarter of this year, surpassing market consensus. With the launch of its advertiser platform and sustained demand for live video streaming such as Olympic broadcasts, growth is expected to continue in the second half of the year.

On the 27th, Yuanta Securities maintained a 'Buy' rating on AfreecaTV and raised the target price by 64.6% to 163,000 KRW. The closing price the previous day was 127,800 KRW.

According to the Financial Supervisory Service's electronic disclosure system, AfreecaTV posted provisional consolidated sales of 65 billion KRW and operating profit of 21.5 billion KRW in the second quarter of this year. This represents increases of 44.1% and 96.7%, respectively, compared to the same period last year. The consensus estimates were also exceeded by 0.1% and 3.6%, respectively.

Specifically, platform sales reached 50.6 billion KRW, up 29.6% year-on-year. Advertising revenue increased by 200.1% during the same period to 12.9 billion KRW. Changyoung Lee, a researcher at Yuanta Securities, explained, "In the second quarter, due to increased outdoor activities following COVID-19 vaccinations and eased social distancing, donation economy sales (platform sales) slightly decreased compared to the previous quarter, but content-type advertising revenue surged due to new game releases, increased game leagues, and growth in non-game advertising," adding, "This was the main reason for exceeding market expectations."

Growth is expected to continue in the second half of the year. The launch of the advertiser platform 'AAA' is expected to lead to an increase in non-game advertisers and higher advertising rates, which will fully materialize in the second half. Additionally, demand for live video platforms such as Olympic broadcasts and new game releases is expected to grow in the second half. Researcher Lee forecasted, "AfreecaTV, which has high user loyalty based on live video content, can accelerate its earnings growth next year by combining growth in donation economy gifts and advertising revenue with the rapidly growing live commerce sector."