[Click eStock] Golfzon, an Undervalued 'Franchise' Company Excelling in Exports

[Asia Economy Reporter Lee Seon-ae] NH Investment & Securities announced on the 2nd that it maintains a buy rating and a target price of 260,000 KRW for Golfzon. It is expected that the number of franchise stores will increase similarly to this year, and qualitatively, a rise in average spending per customer and growth in round sales are anticipated to be significant.

Baek Jun-gi, a researcher at NH Investment & Securities, stated, "Golfzon is still a platform operator with room for expansion within the golf industry and should be classified as a franchise company with growing exports," adding, "The current stock price is clearly undervalued compared to other franchise sectors that generate most of their revenue domestically. Additionally, recently acquired companies such as Golfzon CM (golf course ERP) and Golfzon Deka (golf rangefinders) are expected to serve as additional growth drivers."

He continued, "Concerns that a slowdown in field golf demand will lead to a decline in screen golf demand are considered excessive. Strong third-quarter earnings are expected, based on the significantly lower cost of screen golf compared to field golf," and added, "Unique content (such as real-time multiplayer and 5-split plates) is also continuously increasing, securing scalability within the platform."

Meanwhile, Golfzon's 4.14 million members are also a key point for re-evaluating the platform business. The number of members who played rounds in the past year reached 2 million, demonstrating that Golfzon has secured many active users. Despite higher round costs compared to competitors, Golfzon holds a competitive advantage in customer lock-in and data utilization, supporting expectations for overseas sales growth. Since 2018, Golfzon's overseas sales have grown at an average annual rate of over 30%. This trend is observed not only in its main markets, the United States and China, but also in Japan and Vietnam. Although the first half of this year was sluggish, a significant rebound in sales from the U.S. and China is expected in the second half.