[Click eStock] "Cheil Worldwide, Advertising Market Recovery Still Far Away...Target Price Down 11%"

[Asia Economy Reporter Park Ji-hwan] Daishin Securities on the 18th downgraded the target price of Cheil Worldwide from 28,000 KRW to 25,000 KRW, an 11% decrease, stating that a recovery in the advertising market is still difficult to expect. However, the investment opinion was maintained as 'Buy'.

Researcher Kim Hoe-jae of Daishin Securities explained, "Advertising order sluggishness due to the impact of COVID-19 is inevitable to continue," adding, "Labor cost burdens will also persist until the second quarter, leading to a downward revision of operating profit." Although the burden of labor costs is expected to gradually decrease in the second half of the year, the prolonged impact of COVID-19 is expected to cause continued sluggishness in the advertising market.

Researcher Kim Hoe-jae explained, "Europe, which accounts for 28% of GP and had shown double-digit growth, has turned to negative growth, and the domestic market, which accounts for 23% and achieved 7% growth in the first quarter compared to the previous year, also experienced negative growth." While the U.S., accounting for 7%, continues to achieve double-digit growth due to the effect of newly established subsidiaries, China, accounting for 17%, recorded a 17% negative growth in the first quarter compared to the previous year.

Researcher Kim predicted, "As the COVID-19 situation continues, advertising sluggishness will inevitably persist for a considerable period," and "Even after COVID-19 ends, marketing is expected to be conducted mainly digitally rather than offline."

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