[THE INVESTOR] There are not many well-known software companies in Korea with diversified utility and functional programs ranging from browsers, portals to content, advertising and security that can match the scale of Silicon Valley.

However, ESTsoft, which is widely known for its ALTools package utility software, is one of the few local software companies trying to stand out in the consumer tech market dominated by either manufacturers such as Samsung Electronics and LG Electronics, or software giants like Google and Microsoft.


With its flagship security program, ALYac, and utility program, ALZip, ESTsoft is about to see its profit grow by generating synergy with its Swing browser, ZUM search portal and advertising platforms, following ZUM’s earnings rebound last year, analysts say.

ESTsoft’s ALYac is currently the No. 1 most downloaded and used security program in Korea, with the number of users reaching 17 million, as well as its ALZip utility program for file archives and compressions, according to the company’s first-quarter financial report and market research firm Korean Click.

“The company is seeing an increase in its revenue from search, display and shopping advertising as users of its programs and browser are either visiting the ZUM portal or setting the search portal as its default starting page,” said Lee Ji-hoon, an analyst at SK Securities.

“With its strong recognition in software programs for personal computers, those programs for mobile devices are growing,” he added, noting that the number of downloads for ALYac for the Android-based operating system reached over 120 million.

ESTsoft posted consolidated operating profits of some 976 million won in the first quarter of this year, from an operating loss of 1 billion won a year ago. Its sales reached about 13.5 billion won in the first quarter, up from 10.5 billion won a year ago.

The company made a turnaround as its subsidiary ZUM Internet achieved its first profitability last year. ESTSoft holds a majority 72.2 percent stake in ZUM Internet, which develops and operates ZUM and Swing. ZUM Internet was listed on the Konex for start-ups on June 10, this year.

ZUM Internet’s operating profit reached 155.7 million won last year, from a loss of 1 billion won a year earlier. ESTSoft had a 52 week high of 27,100 won, and a low of 9,070 won.

Besides its flagship products ALYac and ALZip, its other programs such as ALSee, a photo editor, and ALSong, a music player, are also currently both No. 1 in their segments, according to Korean Click.

Its gaming business is not doing well, but analysts say the company’s plan for overseas expansion and distribution of its games will help its bottom-line.

Established in 1993, the company is looking to further strengthen its software through updates, and boost its advertising revenue by expanding its mobile ad platform.

The company is also currently eyeing artificial intelligence for new growth, noting that the global AI software market’s value is expected to increase to $165 billion next year, from $127 billion in 2015.

“We seek to develop and commercialize AI as the company sees that AI will be the core in bringing new industrial revolutions,” the company said in its regulatory filing.

This is the 15th in a series of articles analyzing major companies by market capitalization traded on the tech-heavy KOSDAQ market. -- Ed

By Park Hyong-ki (hkp@heraldcorp.com)