DearU, a Kakao fan platform, is in the news due to its projected revenue surge in 2023. The platform, focusing on 1:1 private messaging between artists and fans, aims to achieve 78.5 billion KRW in sales. This marks a 59.5% increase from last year. It also targets an operating profit of 28.6 billion KRW, a 75.4% growth.

Growth drivers

Lee Hwan-wook from Yuanta Securities highlighted the growth drivers. He mentioned the recent addition of monster rookie ZEROBASEONE and the virtual idol group PLAVE. With participants from Miss Trot‘s second season, DearU expects a surge in subscribers. By year-end, projections show around 2.55 million subscribers. The fourth quarter alone might add about 140,000.

DearU plans to collaborate with M-Up Holdings in Japan to launch Bubble. This move could boost DearU’s growth next year. “M-Up Holdings has around 300 Japanese artist IPs and 2 million paying users. With the launch, we see 10% of JV sales and 44% of equity method profits in next year’s results,” said Lee Hwan-wook.

DearU mainly earns from its monthly subscription service, costing 4,500 KRW per artist. The platform maintains an 80-90% retention rate, showing high user satisfaction. Lee Hwan-wook discussed the success factors. He talked about new fandoms expanding globally, increasing subscriptions. New IPs also add to the growth. “By Q3, the top four entertainment companies might exceed last year’s album sales, reaching 8.2 million units. We see a 10-15% subscription increase next year,” he added.

The future of DearU

The platform’s appeal grows with SM Entertainment’s new boy group RIIZE, NCT Tokyo‘s upcoming launch in Q4, and new girl groups next year. New global groups from JYP Entertainment and other IPs from entertainment companies are coming soon.

Sales might rise by 4.3 billion KRW, with a similar equity method profit. In 2024, sales could reach 110.7 billion KRW, a 41.1% year-on-year growth. The operating profit might be 45.9 billion KRW, a 60.6% increase, with a 41.5% profit margin.

Lee Hwan-wook is optimistic about DearU’s stocks. He noted the current stock price, with a 12-month price-to-earnings ratio of 25 times, is historically low. With an expected 37% growth rate in average earnings per share over two years, he sees a low stock price risk. DearU’s stock price was 41,600 KRW on the 25th, with a 55,000 KRW target price set by him. – K-Pop News Writer

Featured Image: DearU is poised for success in 2023. Source: X/@dearu_bubble.