[Click eStock] Cheil Worldwide, Holding Strong in US and Europe Despite COVID-19 Hit

Avoiding Negative Growth Through US and European Performance Growth Despite Sharp Decline in Domestic Results

[Asia Economy Reporter Minwoo Lee] Cheil Worldwide is expected to avoid profit decline despite extremely deteriorated business conditions. This is analyzed to be because, although domestic performance sharply decreased, it performed well overseas, mainly in the US and Europe.

On the 10th, Ebest Investment & Securities forecast that Cheil Worldwide will achieve a gross profit of 255.7 billion KRW and an operating profit of 33 billion KRW in the first quarter. This represents increases of 1.2% and 2.6%, respectively, compared to the same period last year. Although it is inevitable to fall short of market expectations, it is expected to avoid profit decline even amid extreme recession.

Researcher Hyunyong Kim of Ebest Investment & Securities explained, "Domestic gross operating profit, which was directly hit by the novel coronavirus infection (COVID-19), sharply decreased by 7.9%, but overseas markets, mainly in the Americas and Europe, performed well with a 3.7% increase, preventing negative growth. Although regions such as China and Southeast Asia are also affected by COVID-19, it is expected that thorough profit and loss management will be carried out through cost control and adjustment of investment speed."

In regions heavily impacted by COVID-19, including South Korea, China, and Southeast Asia, it is expected to be difficult to avoid a sharp decline in sales, especially in retail events. Nevertheless, it is considered positive that budget allocation is focused on e-commerce and online channels, mainly through group affiliates. Additionally, regions such as the Americas, Europe (with Italy accounting for 3%), and Southwest Asia are analyzed to have relatively low impact from COVID-19 so far. Researcher Kim diagnosed, "Even if a dramatic balloon effect is not expected after the COVID-19 situation ends, a strong pattern of low first half and high second half performance is certain."

Meanwhile, Ebest Investment & Securities lowered Cheil Worldwide's target stock price from 32,000 KRW to 28,000 KRW but maintained a 'Buy' investment rating. The closing price on the previous day was 18,750 KRW.

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