[Alpha Biz=(Chicago) Reporter Paul Lee] Daol Investment & Securities raised its target price from 120,000 won to 160,000 won on the 16th, saying it is expected to improve its long-term performance as Afreeca TV evolves into a virtual idol platform in the future.
"Afreeca TV's operating profit reached KRW 26.4 billion in the fourth quarter of last year, up 71% year-on-year, exceeding the consensus. This is due to strong sales in the donation, economy and futures sector," said Daol Investment & Securities.
"In terms of donation and economic futures, the transfer from Twitch will result in an increase in PU (Paying Users) and a decrease in ARPPU (the average amount a user pays per month)," Daol Investment & Securities said. "Considering this year's sales guidance below our previous forecast, the upward effect of the PU compared to the decrease in ARPPU may fall short of previous expectations."
Daol Investment & Securities said, "We will lower the short-term operating profit forecast to reflect the fact that the launch impact of the global platform is likely to be reflected in costs rather than sales in the beginning."
Specifically, the company lowered its annual operating profit forecast for this year by 4% from 188.8 billion won to 14.3 billion won.
Daol Investment & Securities expects operating profit for next year and next year to be 120.3 billion won and 135.7 billion won, respectively, raising its existing estimates by 4% and 10%, respectively.
On the KOSDAQ market the previous day, Afreeca TV closed at 121,500 won, up 2.97% from the previous day.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
