Gmarket Auctions Off Its Own Earnings

Gmarket Fourth Quarter 2006 Revenues Increased 67 Percent to $51.6 Million Year Over Year and Diluted EPS Increased to $0.13 From $0.09 in Fourth Quarter 2005; ESTIMATES were $0.15 to $0.16 and $51.5 to $51.7 million.

The Company’s gross merchandise value ("GMV"), which represents the total value of all items sold on Gmarket’s website, increased by 53% to $737.4 million (Won 682.4 billion) for the fourth quarter of 2006 compared to $480.8 million (Won 445.0 billion) for the same period in 2005.  Transaction fee revenues for the fourth quarter of 2006 were $31.5 million (Won 29.1 billion), representing a 30% increase from $24.2 million (Won 22.4 billion) for the fourth quarter in 2005. Advertising and other non-transaction revenues for the fourth quarter of 2006 were $20.1 million (Won 18.6 billion), representing a 200% increase from $6.7 million (Won 6.2 billion) for the same period in 2005.  During the fourth quarter of 2006, the Company’s registered user base grew to approximately 11.0 million, a 9% increase from 10.1 million registered users at the end of the third quarter of 2006. In addition, the Company averaged 17.1 million monthly unique visitors in the fourth quarter of 2006, a 22% increase from 14.0 million unique visitors during the fourth quarter of 2005.

The guidance is not really noted except for how much they plan to clear in merchandise:  Gmarket expects GMV for full year 2007 to range from $3.3 billion (Won 3.1 trillion) to $3.8 billion (Won 3.5 trillion). For the first quarter of 2007, Gmarket expects GMV to range from $767 million (Won 710 billion) to $811 million (Won 750 billion).

GMKT traded up more than 4.5% to $19.89 on the day but shares are down more than 14% at $16.95 in after-hours.  We’ll have to see if they give any more formal guidance or if this is it. 

Jon C. Ogg
March 8, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.