[Click eStock] "WantedLab, Slower Growth Rate in Second Half... Target Price Down 19%"

Daol Investment & Securities Report

[Asia Economy Reporter Minji Lee] Daol Investment & Securities maintained a strong buy rating on Wanted Lab on the 3rd and set a target price of 42,000 KRW, down 19%.

Wanted Lab recorded sales of 13.8 billion KRW and an operating profit of 4 billion KRW in the second quarter, growing 77.8% and 101.6% respectively compared to the same period last year. By segment, AI Matching posted sales of 10.1 billion KRW, up 65.8% year-on-year. The number of successful candidates increased by 58.2% to 3,956 during the same period, resulting in a recruitment fee of 4.73 million KRW. This was because companies reducing new hires focused on recruiting key personnel.

However, growth is expected to slow in the second half of the year. Jinwoo Kim, a researcher at Daol Investment & Securities, said, "The number of successful candidates in June and July increased by 41.9% and 26.3% year-on-year, respectively, showing a slowdown in growth," adding, "Companies have reduced new job postings for two consecutive months due to concerns about economic slowdown."

The freelancer matching service Geeks posted sales of 1 billion KRW in the second quarter, growing 138.2%. This level meets the annual target of 4 billion KRW. Researcher Kim explained, "When the corporate economy worsens, demand for freelancers with low fixed costs is expanding," and added, "Along with an increase in applicants' application rates and average fees, it will help defend against the slowdown in sales growth of existing business units."

Wanted Lab's market share in the recruitment market is about 1.4%. As it is an early-stage market, quarterly margin fluctuations are inevitable due to expenses related to new businesses. Researcher Jinwoo Kim stated, "Since the profitability of the matching segment was confirmed through the second-quarter results, we recommend investment based on sales growth and annual profit increase."