[Click eStock] "Seoul Auction Continues Strong Performance... Stock Still Undervalued"

[Asia Economy Reporter Ji-hwan Park] Hi Investment & Securities evaluated on the 25th that Seoul Auction will accelerate its performance turnaround starting this year as the domestic art market enters a growth phase.

Lee Sang-heon, a researcher at Hi Investment & Securities, stated, "Under the low-interest-rate environment where investment in real assets is expanding, artworks have emerged as a financial investment means for the general public." He added, "In the past, artwork prices were high, so the main consumers were a small number of collectors or wealthy individuals, but recently, with the activation of artwork co-purchase platforms and diversification of consumers, the domestic art market is expected to enter a growth phase."

Seoul Auction has held four regular auctions annually in Seoul during March, June, September, and December. However, this year, buoyed by increased demand for artworks, it plans to hold six regular auctions in February, April, June, August, October, and December, two more than usual. Additionally, seven planned auctions are scheduled. Online auctions, which have been held about 20 to 25 times annually, are expected to exceed 40 times this year.

In the first half of the year alone, the total winning bid amount reached 70.4 billion KRW, surpassing the 43.5 billion KRW level of the same period last year. Most notably, the offline auction winning rate recorded 84% in the first half of this year, maintaining a higher level than previous years. Researcher Lee Sang-heon said, "As the trend of expanding demand for artworks continues in the second half, a high winning rate and total winning bid amount are expected," adding, "With the average winning bid amount increasing, the performance turnaround is expected to accelerate this year."

He also anticipated accelerated growth through Seoul Auction Blue's expansion of NFT-related businesses. The researcher said, "The technology of NFTs (Non-Fungible Tokens) is being applied in various fields and is gaining attention in the digital market, especially with art content emerging as a new paradigm."

There is also an analysis that valuation rerating is possible due to performance improvement and business expansion. The researcher said, "The stock is trading at a price-to-earnings ratio (PER) of 22.4 times based on this year's expected performance," adding, "As awareness of alternative investments expands and the consumer base diversifies, increasing demand for artworks, the domestic art market is entering a growth phase, so the company's performance turnaround is expected to accelerate starting this year."