[Click eStock] "Cafe24, Expectations for YouTube Shopping Remain Intact"

Shinhan Investment Corp. analyzed on June 11 that despite the sharp decline in Cafe24's stock price, expectations for YouTube Shopping remain intact. The company did not provide an investment opinion or target price.

Kim Aram, a researcher at Shinhan Investment Corp., stated, "Despite strong results in the first quarter, the stock price plunged by 31%," adding, "This was due to the disappointing growth rate of transaction volume compared to the previous quarter." She further assessed, "Although it outperformed the market growth rate, it gave the impression that YouTube Shopping is not spreading at a very rapid pace."

However, she predicted that YouTube Shopping would grow in the medium to long term. She said, "I believe the medium- to long-term growth narrative of YouTube Shopping has not been completely undermined," emphasizing, "Koreans spend up to 40 hours per month watching YouTube, and Google is highly motivated to foster the Korean YouTube Shopping ecosystem."

Shinhan Investment Corp. expects Cafe24's second-quarter revenue and operating profit to reach 81 billion won and 11.3 billion won, respectively, representing year-on-year increases of 8.7% and 43.9%. She explained, "Next year's price-to-earnings ratio (PER) has fallen below 30 times," and noted, "The company's limited disclosure of transaction volume and YouTube Shopping-related information means earnings visibility is not high, but I believe this actually creates an investment opportunity."

She added, "If second-quarter and second-half results exceed expectations, we anticipate a flexible recovery in investor sentiment," and highlighted, "A rebound in consumer spending in the second half is also expected, thanks to factors such as easing political uncertainty and discussions on supplementary budgets."