[Click eStock] "Polaris Office, Strong Earnings Streak with NFT and Metaverse Business Expansion as a Bonus"

[Asia Economy Reporter Ji-hwan Park] KB Securities evaluated Polaris Office positively, citing its continued strong performance and its expansion into new businesses such as non-fungible tokens (NFT) and the metaverse.

Polaris Office is an office software specialist company that was listed on KOSDAQ in 2005. Its main products are cloud office and enterprise office solutions, and it also provides mobile security solutions and collaboration solutions. Through its subsidiary I&V Games, it has released self-developed mobile games in South Korea, Taiwan, and Japan. Regarding its cloud office, it currently has 113.3 million subscribers across 242 countries.

In the third quarter of this year, sales amounted to 5.6 billion KRW, a 2.7% decrease compared to the previous year. Operating profit turned positive at 620 million KRW. Yoon Chang-bae, a researcher at KB Securities, stated, "Following the increase in remote work environments after COVID-19, growth in office software and enterprise collaboration solution businesses led to a return to profitability starting from the second quarter of this year," adding, "We are focusing on continuous performance growth going forward."

In particular, growth in the office market is expected due to the transition to cloud work environments. Since its launch in 2014, Polaris Office has steadily increased its user base. It has 9.5 million monthly active users (MAU), with 20,000 to 50,000 new users joining daily. Based on its 110 million subscribers, it is also pursuing platformization by incorporating new businesses such as OTT and commerce.

Researcher Yoon said, "We have secured stable growth conditions through collaboration with Naver," and added, "With the signing of an MOU, Polaris Office web services will be pre-installed on Naver’s educational platform Whale Book and Whale OS." The supply of Polaris Edu products has begun to the Gyeongnam Office of Education, and there is potential for expansion to other education offices in the future.

The entry into NFT and metaverse businesses, securing new growth engines, was also positively evaluated. Through the blockchain platform Polaris Share, they are building a business model called Share to Earn, which allows users to generate revenue by sharing documents. Based on the existing 5 billion documents and 110 million subscribers worldwide, an active document NFT ecosystem can be established.

However, the overhang issue remains a risk factor. Convertible bonds amounting to 8.06 billion KRW correspond to 8,003,975 convertible shares. The fact that these shares, which represent 20.3% of the circulating shares, could flood the market at any time is a burden.