[Click e-Stock] "Digital Daesung Expected to Post Record Q3 Results... Focus on Enhanced Shareholder Returns"

Digital Daesung is expected to post record-breaking results in the third quarter of this year, driven by seasonal peak effects and an increase in students retaking the university entrance exam, according to recent analysis.

On August 4, Yuanta Securities released a report forecasting that Digital Daesung is highly likely to achieve its all-time best performance in the third quarter, following improved results in the first half of the year. The brokerage also highlighted the company’s aggressive shareholder return initiatives, including a plan to cancel treasury shares and an additional share buyback worth 10 billion won, as key investment points.

Myungjun Kwon, a researcher at Yuanta Securities, stated, "The third quarter is a seasonal peak for Digital Daesung. Considering that results in the first half improved compared to the same period last year, record-high performance is also anticipated for the third quarter."

Researcher Kwon pointed out several factors behind the company’s performance improvement: the continued inflow of students retaking the university entrance exam, as this is the last cycle before the entrance exam policy reform, and the increase in mock test fees, leading to related revenue being concentrated in the second half of the year.

Results in the first half were also solid. Revenue from the high school online segment grew 22.0% year-on-year to 67.6 billion won, thanks to a rise in student numbers and higher average selling prices. Due to the business structure’s high fixed costs, this increase in revenue translated into improved profitability.

The offline business also maintained its growth momentum. Revenue from the medical school track reached 26.8 billion won, a 23.0% increase compared to the previous year, and Gangnam Daesung Dormitory QUETTA recorded 14.8 billion won in revenue, up 10.6%. According to researcher Kwon, economies of scale led to improved profitability as well.

He also noted that gains from the disposal of equity stakes in the company’s Vietnamese joint venture further amplified the growth in net profit.

Securities industry analysts predict that enhanced shareholder returns will accompany improved earnings. Digital Daesung plans to cancel 627,972 treasury shares acquired through its existing trust agreement in the second half of this year. In addition, the company intends to repurchase an additional 10 billion won worth of its own shares between September 2026 and March 2027.

Analysts anticipate that Digital Daesung will continue to achieve earnings growth, benefitting from the seasonal peak and changes in the entrance exam environment, while also boosting its corporate value by expanding shareholder return through treasury share cancellation and additional buybacks.

This content was produced with the assistance of AI translation services.