[Click eStock] "Jieosoft Focuses on Oasis Growth... Profit Turnaround Expected"

Hanyang Securities analyzed on the 15th that the growth of its subsidiary, fresh food dawn delivery and offline distribution company Oasis, is expected for JioSoft.

JioSoft operates in the IT service sector, providing total services across all areas of IT including wired and wireless system development, operation, and maintenance, as well as in the advertising business sector and distribution & e-commerce business sector. It holds a 55.17% stake in its subsidiary Oasis, a fresh food dawn delivery and offline distribution company.

As of the first half of this year, JioSoft recorded consolidated sales of 250.5 billion KRW. Among these, Oasis's sales accounted for 92.1%. Given the large sales proportion of its subsidiary Oasis, it is analyzed that JioSoft's stock price is highly correlated with Oasis's performance.

Lee Jun-seok, a researcher at Hanyang Securities, stated in a report on the same day, "The increase in single-person households, accelerated concentration in the metropolitan area, and the contactless trend promoted by COVID-19 will stimulate the growth of the fresh food dawn delivery market," adding, "This is expected to have a positive effect on the company's stock price."

Researcher Lee explained, "It is fair to say that cost reduction is the core of the fresh food dawn delivery market, and Oasis has achieved effective cost reduction by utilizing an efficient distribution structure, a smart logistics center with a 'combined packaging' structure, and its independently developed logistics solution 'Oasis Route.'"

As a result, it is analyzed that Oasis continues to maintain high customer satisfaction and profitable management. In fact, the annual increase in Oasis subscribers rose from 230,000 in 2019 to 1.28 million in 2022, and the average purchase amount per transaction increased from 30,595 KRW in 2019 to 41,029 KRW as of the end of the first half of this year. The proportion of loyal customers is also high, and the inventory disposal rate has been achieved at 0.18%.

Researcher Lee said, "The increase in online customer subscribers along with the expansion of offline stores raises expectations for the company's performance," forecasting, "This year, consolidated sales will reach 520.4 billion KRW and operating profit 14 billion KRW, achieving a turnaround to profitability."

He added, "While these strong results are partly due to market growth, the internal motivation for growth within the company after the withdrawal of Oasis's IPO was a key factor," and predicted, "If private brand (PB) products are added to the dawn delivery in the future, the company's stock price will enter the next step."