[Click eStock] "Daekyo, Clear Gradual Earnings Recovery in Q2... Target Price Up"

[Asia Economy Reporter Park Jihwan] Ebest Investment & Securities evaluated on the 2nd that Daekyo is showing a gradual recovery in performance, escaping the impact of COVID-19.

Jeong Hongsik, a researcher at Ebest Investment & Securities, stated on the 2nd, "Daekyo's Q2 performance recorded sales of 161.1 billion KRW and an operating loss of 100 million KRW," adding, "due to the base effect compared to Q2 last year when performance sharply declined because of COVID-19, the restructuring of the loss-making complete book door-to-door sales, and labor cost reduction effects, the operating loss margin has decreased."

In the core business, the Noonnoppi division recorded sales of 121.1 billion KRW and operating profit of 2.2 billion KRW, which is a decrease of 3.3 billion KRW compared to last year's operating profit of 5.5 billion KRW in the Noonnoppi division. Researcher Jeong explained, "it is understood that 2.7 billion KRW in advertising costs for the Summit Series (digital classes) were reflected," and "the proportion of relatively high-priced digital classes such as Summit Math expanded from 20.8% at the end of last year to 23.1% in June this year." He further explained that the average selling price rose by 2.9% over one year, and the number of subjects (students), which sharply decreased after COVID-19, is showing a similar level compared to the same period last year.

However, the excellent asset value stands out. Researcher Jeong said, "The per-share value based on asset value of 453.2 billion KRW is 5,350 KRW, which exceeds the current stock price," and added, "The stock price can be interpreted as undervalued from the asset value perspective, so the target stock price is raised to 5,000 KRW."