DearU runs "bubble," a paid subscription service that lets fans receive private messages from the artists they follow, earning a monthly subscription fee for each artist a fan subscribes to. In Q1 2026 revenue reached ₩23.4 billion and operating profit ₩9.7 billion, for an operating margin around 41% and a 77% year-on-year jump in operating profit, while subscribers held at roughly 2 million. What stands out recently is that the company is strong while profit growth continues, helped by expanding subscription and royalty income in Japan and China and a thick net-cash position, but subscriber counts can wobble when an artist is inactive or an agency leaves the platform, so the pace of new artist onboarding and overseas expansion is the key variable.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt ratio, current ratio and interest burden all look healthy.
- Revenue rose 12.0% year over year, and the pace is quickening (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 33.4% higher than a year earlier.
- ROE is 8.9% (controlling-interest basis). It is above the sector average.
- Operating margin is 37.4%.
- The P/E sits above the sector median, reflecting elevated expectations.
Ownership & governance As of 2025-12-31
Largest shareholder SM Entertainment 42.58% (corporate)
Controlling bloc incl. related parties 50.02%
With the controlling bloc holding 50%, control is very secure but the free float is thin.
🔎 In-depth analysis
- DearU makes its money from "bubble," a private-message subscription service that connects K-pop artists with their fans.
- A fan pays a monthly fee for each artist they follow and receives personal, message-style communication from that artist.
- Most of the revenue comes from these monthly subscription fees, which gives the business a strong recurring-revenue character: once a fan signs up, they tend to keep paying.
- The largest shareholder is SM Entertainment, and artists from several agencies are hosted on bubble.
- More recently the company has been expanding beyond Korea into Japan and China; in China, royalty income through a Tencent Music-affiliated platform began to come in from 2026.
- The stock trades at ₩21,700, below both its 20-day (₩22,064) and 60-day (₩26,250) moving averages, and sits roughly 65% below its one-year high.
- It fell 24.8% over the past three months and 45.9% over six months, a sizable medium-term decline.
- The RSI (a gauge that compares recent up-moves and down-moves on a 0-100 scale over the last 14 days) is 44.7, neither overheated nor oversold but neutral.
- The one-month return is -0.7%, so the pace of decline has settled.
- Start with the valuation metrics.
- On last year's earnings the P/E ratio (how many times one year of profit the share price represents) looks high at 27.7x.
- That figure, however, reflects a 2025 net profit depressed by non-operating factors, which makes the stock look more expensive than its underlying operating strength.
- The operating margin is 37.4%, very high as befits a platform business, and ROE (how much the company earns in a year on its equity) is 8.9%.
- The balance sheet is very solid.
- The debt-to-equity ratio looks like 116%, but there is almost no interest-bearing borrowing, and much of that liability is deferred subscription income.
- The current ratio is 695%, giving ample short-term liquidity.
- Net debt (total borrowings minus cash) is negative ₩123 billion, meaning the company holds ₩123 billion more cash than debt, a net-cash position.
- The FCF yield (the cash actually generated relative to market cap) is 6.4%, so earned cash builds up steadily.
- There are also debt-adjusted valuation metrics: EV/EBIT (a debt-inclusive counterpart to the P/E) is 13.3x and EV/EBITDA is 12.2x.
- With so much net cash, the burden is considerably lighter once debt is taken into account than the P/E alone would suggest.
- Revenue has trended upward, growing about 20% a year on average over five years.
- In 2025 revenue was ₩83.8 billion, up 12% from the prior year, and operating profit was ₩31.4 billion, up 23.5%.
- Net profit in 2025, however, fell 23.6% to ₩18.6 billion.
- Operating profit rose while net profit fell because of non-operating factors such as the valuation of investment assets; in other words, the earnings power of the core business actually improved.
- The trend became clearer in 2026.
- Q1 revenue was ₩23.4 billion, up 33.4% year on year, and Q1 operating profit surged 76.9% to ₩9.7 billion, while net profit more than doubled to ₩11.8 billion.
- This year's strong profit has three drivers: first, subscription revenue accumulates repeatedly while cost growth stays mild, lifting the operating margin into the 41% range; second, Japanese subscriptions and Chinese royalties were added as new income sources; and third, the non-operating drag that weighed on 2025 lifted, putting net profit back on a normal track.
- Extending this trajectory, this year's net profit is expected to rise well above last year's confirmed ₩18.6 billion.
- So while the P/E looks high on last year's results, it becomes much lower on this year's expected earnings.
- The flow confirmed through disclosures runs as follows.
- In May 2026 the company reported preliminary Q1 results in a fair-disclosure filing, a strong quarter with revenue of ₩23.4 billion and operating profit of ₩9.7 billion, up 77% year on year.
- On the same day it held an investor briefing to explain the business directly.
- In March it voluntarily disclosed a corporate value-up plan, setting out its shareholder-return and medium-term growth direction on its own initiative.
- In April it decided to acquire shares in another company, broadening its business linkages.
- Dividends continue as well: at ₩316 per share, a dividend yield of about 1.5%, the company maintains a policy of returning roughly 40% of net profit as dividends.
- With a thick net-cash position, it has the capacity to fund both dividends and investment.
- Start with the strengths.
- DearU is a high-margin platform with recurring revenue from fan subscriptions.
- With an operating margin of 37-41% and net cash of ₩123 billion, its finances are very stable.
- In 2026 operating profit surged 77% on a quarterly basis, making profit growth clear.
- Last year's net profit was held down by non-operating factors, so the P/E looks high on last year's basis; but on this year's expected earnings it is, if anything, low relative to peers, which reads as an undervaluation signal.
- The cautions are equally clear.
- Subscriber counts can wobble when an artist is inactive or an agency leaves the platform.
- With domestic growth entering a mature phase, future growth depends heavily on the pace of overseas expansion in Japan, China and elsewhere.
- Net profit can swing quarter to quarter because of non-operating items such as the valuation of investment assets.
- In short, if new artist onboarding and overseas subscription and royalty income grow as planned, profit growth and a low forward valuation gain traction; conversely, if subscribers churn or overseas expansion is delayed, the growth expectations could weaken.
🔎 Valuation vs peers Undervalued
Entertainment and platform names in the K-pop fandom ecosystem whose business character is closest, using largest shareholder SM Entertainment plus JYP, YG and HYBE as the peer set, though DearU is a subscription platform with a higher-margin structure than a pure entertainment company.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| SM Entertainment | 4.92x | 1.70x | 34.63% |
| JYP Entertainment | 10.94x | 2.83x | 25.87% |
| YG Entertainment | 20.79x | 1.49x | 7.19% |
| HYBE | — | 2.86x | -7.29% |
On last year's results the P/E ratio of 27.7x looks high versus peers. But that multiple reflects a 2025 net profit depressed by non-operating factors, so it is not an appropriate yardstick for a stock at an earnings inflection. In Q1 2026 operating profit surged 77% year on year and net profit more than doubled. On this year's expected earnings, which reflect that trajectory, the valuation drops sharply. The P/S ratio of 6.15x is higher than at entertainment companies, but that is explained by the platform's operating margin being more than twice as high. With plenty of net cash, the burden is lighter still on an EV/EBIT basis (13.3x). Taken together, the stock looks expensive on last year's numbers but sits in undervalued territory on this year's earnings.
Price history Close · MA20 · MA60
The latest close is ₩21,700 and the market capitalization is ₩515.1 billion. The price sits below its 20-day moving average (₩22,064) and below its 60-day moving average (₩26,250). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 44.7, a neutral level. The one-month change is -0.7%, the three-month change is -24.8%, and the position relative to the 52-week high is -64.9%. Relative strength versus the KOSDAQ is 37 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 36% of all stocks. Over the past three months it lagged the index by 5.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -4.99% / 6M -30.05% / 12M -61.56%
Key metrics vs sector median
Valuation
The P/E of 27.65x is above the sector median (13.30x). The P/B of 2.45x is above the sector median (1.58x). That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 10.7%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 2.033x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 8.9%, above the sector average (5.0%). The operating margin is 37.4%. The debt ratio is 115.8%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $50.2M | $49.6M | $55.6M | +11.98% ↑ faster |
| Operating profit | $19.0M | $16.8M | $20.8M | +23.52% ↑ faster |
| Net profit | $17.4M | $16.2M | $12.3M | -23.61% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $26.5M | $32.6M | $50.2M | $49.6M | $55.6M |
| Operating profit | $8.8M | $10.8M | $19.0M | $16.8M | $20.8M |
| Net profit | -$16.7M | $10.9M | $17.4M | $16.2M | $12.3M |
| Revenue CAGR | 4-yr avg 20.32% | ||||
Revenue rose 12.0% year over year (2023 ₩75.7 billion → 2024 ₩74.9 billion → 2025 ₩83.8 billion), and the three-year trend is 'mixed'. The pace of growth also quickened from the prior year. Operating profit rose 23.5% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 20.3%. The two-year revenue CAGR is 5.2%. In the most recent quarter (Q1 2026), revenue was 33.4% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- Revenue grew 12.0% year over year, a sign of growth.
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-05-06EarningsFair disclosure of preliminary consolidated Q1 2026 results — revenue ₩23.4 billion, operating profit ₩9.7 billion (up 77% year on year), net profit ₩11.8 billion, with an operating margin around 41%.Confirms improving core profitability and accelerating profit growth. Grounds for forward earnings offsetting the P/E burden seen on last year's basis. Source
- 2026-05-06IRInvestor briefing (IR) held — the company explained Q1 results and the state of the business directly.Material that raises confidence in the subscriber and overseas-expansion plans. Source
- 2026-03-25IRVoluntary disclosure of a corporate value-up plan — the company set out its shareholder-return and medium-term growth direction on its own initiative.Confirms continued shareholder returns and a growth strategy in an official company document. A basis for medium-term confidence. Source
- 2026-04-29FilingDecision to acquire shares and equity securities in another company — an equity purchase aimed at broadening business linkages.An attempt to expand the business using net cash. A signal of a broadening medium-term business portfolio. Source
- 2026-03-11DividendEx-dividend — dividend of ₩316 per share (dividend yield about 1.5%, payout ratio about 40%).Continued stable shareholder returns backed by net cash. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-05-29Large-business-group status disclosure
- 2026-05-15PeriodicQuarterly report
- 2026-05-06Disclosure
- 2026-05-06EarningsFair-disclosure notice
- 2026-04-29Disclosure
- 2026-04-28OwnershipOwnership-change filing
- 2026-03-25Disclosure
- 2026-03-25Disclosure
- 2026-03-24Shareholders' meeting notice
- 2026-03-16PeriodicAnnual business report
- 2026-03-16Audit report
- 2026-03-11Dividend disclosure
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.