[Click eStock] Shopping App Members Increase by 123%... "Buy Recommendation for Brand X Corporation"

[Asia Economy Reporter Ji Yeon-jin] Daishin Securities announced on the 14th that it expects profit growth in the second half of the year for Brand X Corporation due to the increase in new members of the yoga brand Jessi Mix, and newly issued a buy investment opinion with a target price of 15,000 won.

Han Kyung-rae, a researcher at Daishin Securities, explained, "We reflected the fact that it is an online media commerce company based on performance marketing," adding, "The increase in new members of Jessi Mix and the improvement in profit margin due to reduced advertising expenses since June, as well as the simultaneous growth in scale and profit in the second half compared to the first half and in 2022, are positive."

Brand X Corporation is a company that owns the yoga and Pilates apparel brand Jessi Mix. It has performance marketing company Iruda and self-nail care sales company Gelato Lab as its consolidated subsidiaries. It sells various consumer goods ranging from athleisure fashion to daily necessities, and more than 80% of its total sales are generated from its own mall, making it a media commerce company based on performance marketing.

The expected sales composition for this year is 82% from Jessi Mix, 3% from new brands, and 15% from consolidated subsidiaries.

Jessi Mix had 90,000 new members in the first quarter of 2019, but this expanded to 216,000 in the second quarter of this year. The cumulative number of members grew from 626,000 in 2019 to 1,744,000 in the second quarter of this year, achieving a high growth rate of 123% in a year and a half. Compared to competitors, the sales strategy that matched consumer demand through high cost-effectiveness, casual wear, and category expansion such as underwear was evaluated as effective.

Sales were sluggish until the first quarter of this year due to social distancing, but Jessi Mix's sales in the second quarter grew by 32.9% year-on-year to 39.6 billion won. Researcher Han said, "The launch of the Jessi Mix Black Label new product in September and the effect of disaster relief funds are expected," forecasting that "sales and operating profit in the second half will increase by 26.3% and 277.7% respectively compared to the first half, reaching 108.7 billion won and 15.8 billion won."