[Featured Stock] ESTsoft, AR Glasses Shopping Accelerated by COVID... Targeting 7 Trillion Won Warby Parker

[Asia Economy Reporter Hyungsoo Park] ESTsoft is showing strong performance. It appears that the news of the government preparing e-commerce guidelines to allow buying and selling of eyeglasses (single vision) online has influenced the stock price. ESTsoft's subsidiary DeepEye operates ROUNZ, a real-time virtual fitting eyeglasses shopping mall. The prolonged COVID-19 pandemic has increased the necessity for online eyeglass purchases.

As of 11:32 AM on the 30th, ESTsoft is trading at 18,550 KRW, up 7.54% from the previous day.

According to related government ministries including the Ministry of Economy and Finance, Ministry of Health and Welfare, and Ministry of Science and ICT, the 'Win-Win Coordination Committee' composed of stakeholders in single vision eyeglass e-commerce has prepared an agreement after about five months of discussions.

Eyeglass e-commerce was prohibited under the current 'Medical Technician Act,' but discussions began in 2019 when ROUNZ, a company specializing in virtual try-on technology for eyeglasses, applied for a regulatory sandbox. Overseas, technology enables remote vision tests and online eyeglass transactions. In the U.S., the unicorn company Warby Parker, which provides remote vision testing and augmented reality services, recorded sales of $396 million last year and went public in September this year. Warby Parker's market capitalization reaches 6.8 trillion KRW.

In Korea, online purchases were difficult due to strong opposition from the Opticians Association. Korean opticians are licensed experts who pass a national exam, and they argue that vision tests should be conducted by opticians' expertise to protect public eye health.

Amid escalating social conflicts between existing and new businesses, the government selected 'single vision eyeglass e-commerce' as a 2021 One-Step Model application task in June to reduce social costs. After five months of discussions in the Win-Win Coordination Committee, the necessity of utilizing new virtual try-on technology alongside opticians' expertise was recognized. Participants including the Opticians Association agreed on the need to use ROUNZ's virtual try-on technology on the premise that it does not harm public eye health.

Led by the Ministry of Health and Welfare, guidelines on technical and institutional requirements and standards for eyeglass e-commerce will be prepared, and related industries will form a practical consultative body to promote collaboration such as utilizing virtual try-on technology in eyeglass stores.

The government stated, "This is the first case of reaching an agreement in the health and medical field where conflicts have persisted," and added, "We will prepare a win-win cooperation plan to enhance eyeglass sales services and expand sales channels by utilizing virtual try-on technology in eyeglass stores."

ESTsoft reported consolidated financial statements showing sales of 26.69 billion KRW and operating profit of 2.49 billion KRW in the third quarter of this year. These represent increases of 9.4% and 52.0%, respectively, compared to the same period last year. Net profit surged 200.9% to 2.97 billion KRW. ESTsoft explained that AI core technology has driven strong performance by not only advancing existing businesses but also acting as a growth momentum for new businesses.

New businesses include the continuous expansion of the AI and AR-based virtual fitting eyeglass shopping O2O platform ‘ROUNZ,’ which is leading business innovation in the existing eyeglass industry, as well as the successive launches of ‘Virtual Humans’?AI announcers and instructors?immediately applicable to various industrial environments including the metaverse.

Researcher Sangheon Lee of Hi Investment & Securities explained, "DeepEye provides O2O AI eyeglass shopping through directly operated stores in Gangnam and Pangyo, over 200 partner optician stores, the ROUNZ app, and ROUNZ.com," adding, "Users can use the virtual fitting service combining self-developed deep learning-based facial recognition technology and 3D rendering technology through the ROUNZ app."

He continued, "DeepEye is building an omnichannel connecting online and offline in the eyeglass market through partnerships with optician stores nationwide, expanding its influence in the market, and its growth potential will become visible," and added, "Growth will accelerate through the expansion of AI technology-based services amid improving performance."

Senior Researcher Donghyun Lee of Research Alume analyzed, "A foreign company with a business model similar to DeepEye is the U.S. company Warby Parker," and explained, "Warby Parker is a platform that allows consumers to virtually try on eyeglasses at home and purchase them."