IBK Investment & Securities on the 8th Dear YouRegarding (DearU), the increase in subscriptions due to the expansion of K-POP fandom and the launch of new services were positively evaluated. However, it did not present an investment recommendation or target price.
Lee Hwan-work, a IBK Investment & Securities researcher, said, “Dear You is recording an increase in subscribers by more than 100,000 every quarter this year. Currently, the number of subscribers is between 1.5 and 1.6 million.” If it expands, the rate of increase in the number of subscribers will accelerate.”
Dear You’s sales in the third quarter of this year increased 14.1% year-on-year to KRW 12.2 billion. The researcher’s analysis is that the expansion of the fandom of registered artist IPs and the entry of new IPs led to sales growth. As of the third quarter of this year, domestic and overseas sales accounted for 71.5% and 28.5% of domestic and overseas sales.
However, operating profit recorded KRW 4 billion, a slight decrease of 4.6% compared to the same period last year, due to the burden of server construction and other expenses for the launch of new services.
Researcher Lee said, “In the first half of next year, the official launch of the ‘Live service’ is expected to improve earnings in earnest. It was evaluated.
Dear, You have 1.8 subscribers per person, and its average sales per subscriber are estimated to be around 8,000 won. It has a high subscription retention rate of about 90% per subscriber.
Researcher Lee predicted that Dear You’s expected sales would be 79.2 billion won next year, up 63.2% from the same period last year, and operating profit would be 27.7 billion won, up 72.5%. He said, “Global K-pop demand continues to rise,” and added, “Currently, Dear You is launching a new service, and additional new IPs from large agencies such as SM and JYP are scheduled to be added.”
The researcher predicted that the number of subscribers would reach 2.2 million by the end of this year. In addition, it is expected that operating a separate fan community by idols such as Stray Kids will also lead to additional earnings growth.