7 Days to CSAT, Education Companies in the Spotlight

A prayer for success in the 2023 College Scholastic Ability Test is hung at Jogyesa Temple in Jongno-gu, Seoul, about a week before the exam on the 9th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jang Hyowon] As the 2023 College Scholastic Ability Test (CSAT) is scheduled for the 17th, interest in related education companies is rising in the stock market.

According to the Ministry of Education on the 10th, the 2023 CSAT will be held on the 17th from 8:40 a.m. to 5:45 p.m. nationwide at 1,373 test centers across 84 test districts for general test takers. This year, the number of test takers is 508,030, a decrease of 1,791 compared to last year.

In the stock market, Digital Daesung and Megastudy Education are attracting attention as stocks related to the CSAT.

Digital Daesung is a company that provides educational content for elementary, middle, high school students, and repeat test takers. Its main brands include Daesung MyMac, Gangnam Daesung Dormitory Academy, (Busan) Daesung Academy, Hanuri Open Education, N School, and Dasuin.

More than 75% of its sales come from the high school sector. As of the first half of this year, Digital Daesung recorded sales of 100.8 billion KRW, of which 76.2 billion KRW came from the high school sector. In particular, online lecture sales accounted for the largest portion at 54 billion KRW.

Digital Daesung’s performance has been increasing annually. Sales rose from 148.5 billion KRW in 2020 to 196.9 billion KRW last year. The first half of this year also recorded sales 6.25% higher than the same period last year. Operating profit increased by 17.45% year-on-year to 13.9 billion KRW. The company expects the upward trend in performance to continue in the second half of the year.

As a new business, Digital Daesung is promoting an international school project in Vietnam. In 2020, it signed an international school operation contract with the prestigious U.S. private school ‘Chadwick’ and plans to open Chadwick International School in Ecopark on the outskirts of Hanoi, Vietnam, in August next year. The Vietnam Chadwick International School will be Chadwick’s second overseas campus following the Songdo new city campus.

Digital Daesung is also focusing on stock price management. On the 7th, Digital Daesung decided to acquire treasury shares worth 3 billion KRW. The trust contract period for the treasury share acquisition is until May 7, 2023. Digital Daesung stated that it aims to stabilize the stock price and enhance shareholder and corporate value through the treasury share acquisition.

Megastudy Education is also a company that provides educational content for elementary, middle, high school students, university students, and general adults. The high school education sector accounts for the largest portion of its sales. As of the end of the first half of this year, the high school education sector accounted for 61.1% of sales.

Megastudy Education is expanding its business area through mergers and acquisitions (M&A). On the 21st of last month, Megastudy Education acquired 95.88% of the shares of ST Unitas, an education company famous for ‘Gongdangi’, for 171.8 billion KRW. It plans to create synergy in the employment and adult education sector, which currently accounts for about 7% of total sales. It is also broadening its scope by acquiring AI education startup Prediction.

Jung Hongsik, a researcher at Ebest Investment & Securities, analyzed, “Megastudy Education’s sales and operating profit in the third quarter of this year were 232.7 billion KRW and 58.8 billion KRW, respectively, up 18.7% and 20.1% year-on-year. Despite advertising expenses in the Elly High (elementary) sector, achieving the highest quarterly operating profit in the third quarter is positive.”