[Click eStock] "Topcomedia Expected to Achieve Turnaround Through Profit Structure Improvement"

Independent research firm Aris analyzed on October 28 that Topcomedia is expected to achieve a turnaround through improvements in its profit structure. The firm did not provide an investment opinion or target price.

Aris projected that Topcomedia's consolidated revenue and operating profit for this year will reach 50 billion won and 8 billion won, respectively. Operating profit is expected to turn positive compared to the previous year. Researcher Lee Jaemo explained, "With operating profit reaching 2.9 billion won in the second quarter, the company achieved external growth through changes in its distribution structure and an increased proportion of platform revenue," adding, "Profitability has also started to improve due to cost reductions, such as a decrease in advertising and promotional expenses."

Growth in the Japanese market is also anticipated. Since 2015, Japan has seen an average annual growth rate of 19.4%, and the market accounts for 30% to 40% of Topcomedia's total revenue. Researcher Lee Jaemo stated, "After securing sales capabilities in Japan, profitability is expected to improve as the company shifts from indirect distribution to a direct distribution structure centered on its own platform," adding, "Going forward, while maintaining relationships with existing distribution companies, the company will continue to shift new and main titles to direct distribution."

Additionally, the return of a star author is expected to further improve profitability. He emphasized, "Topcomedia's leading author Hwalhwasan, who has produced numerous hit works, has launched a new title, 'I'll Protect You,'" and added, "With the release of this new webtoon, as well as secondary revenue generated through OSMU, profitability is expected to improve over the medium to long term."