[Click eStock] "Cafe24, Fashion Recovery Expected? Prioritize Earnings Turnaround"…Maintain Neutral

[Asia Economy Reporter Ji Yeon-jin] Yuanta Securities announced on the 4th that although the increase in fashion sales due to the With Corona phase is positive for Cafe24, performance improvement must be confirmed, maintaining a neutral investment opinion and a target stock price of 40,000 KRW.

Researcher Lee Jin-hyeop of Yuanta Securities said, "The equity swap with Naver and investment attraction from Toss are definitely positive for future growth expansion," but added, "The reason why such growth expectations have not been reflected in the stock price is ultimately because poor performance continues, and for expectations to be reflected in the stock price, a performance turnaround must be a prerequisite."

Cafe24 recorded operating revenue of 66.5 billion KRW in the third quarter, a 6.4% increase compared to the previous year, and an operating loss of 7.6 billion KRW. The operating loss was far below the market forecast of 800 million KRW. Due to the negative growth in the marketing division (-17.2%) and the slowdown in the growth of fulfillment YoY, the sales growth rate did not keep pace with the total sales growth rate. In particular, the advertising business showed a significant decline in growth, which had already been slowing. The researcher said, "It is judged to be the result of not responding to intensified competition in the industry," and added, "Efforts are needed to strengthen the company's advertising business capabilities, and on the cost side, the burden of fixed costs is increasing again, which is acting as a burden on performance."