[Click eStock] "AfreecaTV Targets Overseas Markets... High Possibility of Valuation Re-rating"

On the 15th, Korea Investment & Securities maintained a buy rating and a target price of 120,000 KRW for AfreecaTV, stating that through its unique platform business of personal broadcasting, there is a relatively high possibility of valuation rerating as it targets the Southeast Asian market where no dominant player exists yet.

Jung Ho-yoon, a researcher at Korea Investment & Securities, explained, "The core platform and advertising performance are expected to show stable growth in the second half of the year, and the negative impact from Google's in-app payment policy changes, which caused poor performance in the platform in the second half of last year, has been resolved for now. Additionally, as the quality of BJ content improves, the average revenue per paying user (ARPPU) is expected to continue rising."

Furthermore, advertising revenue is also expected to recover in the second half as game companies, the main advertisers of AfreecaTV, resume launching new titles and increase marketing expenditures accordingly. AfreecaTV’s third-quarter revenue is analyzed to have increased by 13.2% year-on-year to 92.6 billion KRW, and operating profit rose by 17.2% to 24.2 billion KRW.

In the long term, the key point to watch for AfreecaTV is its overseas expansion results. Starting with Vietnam, it plans to expand into overseas markets such as Thailand, Indonesia, and Japan in 2024.

Previously, the overseas expansion strategy involved opening the platform and waiting for the BJ and viewer ecosystem to organically develop in the respective countries.

However, based on long-standing relationships with major domestic and foreign game companies, it is expected to adopt a strategy of first producing sufficient killer content, such as esports, that can attract users. Researcher Jung said, "Based on this, the ecosystem will be expanded more stably. Due to AfreecaTV’s business model characteristics, ecosystem expansion through star balloons directly leads to revenue growth, so it will generate overseas market results more stably compared to other platforms with relatively weak revenue models."