[Click eStock] "Innocean Enters Full-Scale Growth Phase"

[Asia Economy Reporter Song Hwajeong] Samsung Securities maintained its 'Buy' rating and a target price of 90,000 KRW for Innocean on the 4th, expecting it to enter a full-fledged growth phase starting this year.

Choi Minha, a researcher at Samsung Securities, said, "Entering a profit growth cycle this year, operating profit is expected to increase by 24%," adding, "This year, the Welcom performance will be fully reflected, bringing about a mid-to-high teens percentage increase in scale, and the existing business will achieve around 7% organic growth. Following the strong turnaround shown in the fourth quarter of last year, momentum will continue."

Innocean's fourth-quarter results last year exceeded consensus, with gross profit increasing by 17.1% and operating profit by 17.7% year-on-year. Researcher Choi analyzed, "Following the previous quarter, acquisition costs of 2.5 billion KRW for the Australian advertising agency Welcom were recognized, but the headquarters' gross profit increased by 15.4%, showing better-than-expected performance. Except for Europe, the Americas, emerging markets, and China all recorded double-digit growth rates." He added, "Welcom was consolidated from December after the acquisition was completed at the end of November, reflecting 7 billion KRW in gross profit. The headquarters saw the removal of the Russian World Cup base burden, and advertising effects related to new models such as the volume and strategic models Grandeur and K5 led to a 21.9% increase in media agency performance, driving profit improvement."

The shareholder-friendly dividend policy is also positive. Researcher Choi said, "Raising last year's dividend payout ratio to 40.6% continuously demonstrates a commitment to shareholder friendliness," and added, "As of the end of last year, cash and cash equivalents stood at 600 billion KRW, providing sufficient capacity for additional investments, and it is expected that mergers and acquisitions (M&A) for growth will be continuously pursued."

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