Millie’s Library
The author is an analyst for NH Investment & Securities. He can be reached at kyeongkeun.kang@nhqv.com -- Ed.
Millie’s Library is an e-book subscription platform boasting outstanding market share. Key indicators for the firm (eg, monthly average free-to-paid conversion rate and repeat subscription rate) are sound. Having made initial investments into content and boosted marketing expenditure, Millie’s Library has entered a full-fledged profit growth phase.
Number-one subscription-based reading platform in Korea
As Korea’s largest subscription-based reading platform, Millie’s Library offers a range of services in the book market, covering not only e-books but also paper books and publishing. Since it began its e-book subscription service in Oct 2017, the firm has enjoyed a steady rise in number of subscribers, which hit nearly 600,000 at end-1H23.
The domestic e-book subscription service market has just entered an early stage of growth, with the number of e-book service users currently standing at 1mn. With a penetration rate of only 7%, the market boasts strong growth potential. Millie’s Library possesses a dominant market share of 62.9%, thanks to its overwhelming competitiveness in service quality (eg, 76% of best sellers and 36% of new book releases uploaded on the platform).
With key indicators remaining sound, full-fledged profit growth ahead
Key indicators for the firm are trending up. In 1H23, the monthly average free-to-paid conversion rate reached 37.4%, and the monthly average repeat subscription rate came to 87.6%. Additional subscriber growth is likely on B2BC and B2B channel expansion.
Viewing that it has passed the phase in which aggressive content investment and marketing expense execution are made to secure paid subscribers, we believe that Millie’s Library has entered a stage of meaningful earnings growth. Having turned to black last year, it is expected to enjoy robust earnings growth in 2023 in line with healthy subscriber expansion. The IPO price band equates to a 2023E P/E of 13.8~15.8x. The firm plans to issue a total of 1.5mn new shares through the IPO, and the post-IPO floating stock portion should stand at 25.07%.