"Thanks for Twitch's Withdrawal"... Naver and AfreecaTV Thrive

AfricaTV, Stock Price Up 50% in Just Over a Month
"Positive Earnings Growth Due to User Increase"

The stock prices of Naver and AfreecaTV continue to rise. Following Twitch's decision to withdraw from the Korean market, streamers are accelerating their migration to other platforms such as Naver's 'Chijijik' and AfreecaTV, increasing expectations of benefits.

On the 8th, the stock prices of Naver and AfreecaTV closed at 226,500 KRW and 98,800 KRW, respectively. Compared to the day before Twitch announced on December 6 last year that it would terminate its Korean service, they rose by 6.34% and 53.89%, respectively. During the same period, the KOSPI and KOSDAQ rose by 2.95% and 7.45%, respectively.

AfreecaTV showed the highest increase. The reason is that it directly benefits from this. Looking at AfreecaTV's business areas, they are largely divided into platform (donation economy gifts, known as Star Balloons), advertising and content production, and others. As of the third quarter of last year, the platform accounted for 77%.

In other words, donation economy gifts from streamers make up a large portion. Therefore, when famous streamers migrate, AfreecaTV benefits accordingly. In particular, the recent news that the popular streamer 'Uwakkud' is moving to AfreecaTV had a positive effect. Seungho Choi, a researcher at Sangsangin Securities, explained, "As of the 5th, top streamers Uwakkud and Lee Segye Idol have confirmed their migration to AfreecaTV. The simple sum of the average viewers of these broadcasters is 150,000, exceeding AfreecaTV's average viewers of 140,000."

Additionally, AfreecaTV's recent rebuilding is also seen as a positive factor. AfreecaTV plans to change its service name and corporate name to 'SOOP'. This is expected to foster growth in relatively non-core streaming areas. He said, "This is not just a simple service name change," adding, "It seems there is an intention to expand into categories such as comprehensive gaming and simple talk broadcasts, where AfreecaTV is relatively weaker."

Naver is expected to see effects in various fields such as advertising through its broadcasting platform Chijijik. As the number of service users increases, it can be utilized in many ways starting with advertising. Hyojin Lee, a researcher at Meritz Securities, said, "High-priced video advertisements are expected to increase through Chijijik," adding, "Securing the young demographic, which is the main demand group for game streaming, is expected to lower the overall platform age group and increase dwell time." She added, "In the long term, an advanced effect of advertising targeting within the Naver ecosystem is expected."

In particular, besides Chijijik, the company itself is also expected to show results in various fields such as artificial intelligence (AI) and webtoons. Hajung Kim, a researcher at Daol Investment & Securities, emphasized, "If the performance of AI-based advertising business is confirmed through the results of global companies or if the value of new businesses preparing for listing, such as webtoons and entertainment, is highlighted due to interest rate cuts, additional increases in corporate value can be expected."