Innocean Faces Inevitable Overseas Sales Decline in Q2... Target Price Down 17%

[Asia Economy Reporter Park Jihwan] Cape Investment & Securities stated on the 31st that Innocean's first-quarter performance was solid due to the effects of new car launches and the acquisition of Welcom, but in the second quarter, a decline in overseas sales caused by the novel coronavirus disease (COVID-19) is expected to be inevitable. Accordingly, the investment opinion 'Buy' was maintained, but the target price was lowered by 16.67% from the previous 84,000 KRW to 70,000 KRW.

Lee Kyung-il, a researcher at Cape Investment & Securities, explained, "Based on the group's captive volume, the headquarters' sales in the second half are expected to continue a steady growth trend," adding, "Welcom's growth is also expected to expand after the global advertising market recovers."

He explained, "The headquarters' captive volume is expected to partially offset the impact of COVID-19 by showing stable growth. Major clients' new car launches took place in January with the GV80 and at the end of March with the G80, and in the second half, the GV70 (mid-size SUV) and GT70 (coupe) are highly likely to be launched as scheduled."

Researcher Lee analyzed, "Considering the market's favorable response to recently launched new cars, the headquarters' sales in the second half are expected to continue steady growth based on captive volume," and added, "In a situation where domestic and international uncertainties are highlighted, major clients are judged to execute proactive brand marketing to expand market share."

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