[Click e-Stock] "SOOP Expected to Aggressively Expand Globally... Target Price Raised"

Target Price Raised by 19% Compared to Previous Level

On February 13, KB Securities stated that it expects aggressive global expansion from SOOP this year and raised its target price from 122,000 won to 145,000 won. The investment opinion remains 'Buy'.

Choi Yonghyun, an analyst at KB Securities, explained, "We have raised the target price by 19% compared to the previous level. Although there is no change in our earnings estimates for 2025, the adjustment reflects the growth momentum of SOOP Global, applying a 2025 price-to-earnings ratio (PER) of 15.6 times."

In the fourth quarter of last year, SOOP recorded sales of 117.6 billion won, up 17.2% year-on-year, and operating profit of 28.6 billion won, up 8.4% year-on-year. Analyst Choi commented, "The fourth-quarter results met the consensus for operating profit. Although profitability declined year-on-year due to participation in G-STAR and year-end streamer events, both the platform and advertising segments maintained solid growth."

There are expectations that this year will mark the beginning of SOOP's global growth. Analyst Choi said, "From the first quarter of this year, a large number of Korean streamers are planning to begin additional global broadcasting, which is expected to lead to a meaningful increase in key indicators. While an increase in capital expenditures (CAPEX) and marketing costs is inevitable, we still believe that maintaining the annual operating margin at last year's level is possible." He added, "SOOP Global is expanding its user base by increasing the number of Korean streamers broadcasting globally at the same time, and the initial response has been positive. In addition, SOOP is also pursuing simultaneous global broadcasting for streamers from other domestic platforms, so the scale of global simultaneous broadcasting may be larger than expected."

Analyst Choi believes that this year's share price momentum lies in growth. He stated, "The main momentum for the 2025 share price is in growth rather than profitability. The global segment is expected to see increased traffic through global broadcasting, while the domestic segment will have another opportunity to increase the number of streamers as streamer contracts expire in the second quarter."

The Financial Supervisory Service's audit is a risk factor. SOOP is reportedly under an accounting audit by the Financial Supervisory Service for allegedly inflating advertising revenue. Analyst Choi noted, "Regardless of the outcome, the FSS audit is currently acting as a risk. However, since the game content advertising segment does not contribute to operating profit, the impact on overall performance is limited."