"Cheil Worldwide, Outstanding Crisis Management Skills... Continued Growth Momentum Next Year"

[Asia Economy Reporter Park Ji-hwan] Meritz Securities evaluated Cheil Worldwide on the 21st, stating that despite the challenging business environment, the company is demonstrating outstanding crisis management capabilities.

Jeong Ji-soo, a researcher at Meritz Securities, explained, "Despite the resurgence of COVID-19, the advertising market is showing signs of recovery," adding, "Even with the global resurgence, the advertising market is gradually recovering from the bottom in the second quarter."

In particular, digital transformation is rapidly occurring centered on North America, China, and Southeast Asia, and growth is expected to continue through next year. Although Europe, India, and Latin America continue to experience the effects of COVID-19, such as a decrease in BTL volume, normalization is anticipated next year.

On a consolidated basis for 2021, gross profit is expected to reach 1,136.7 billion KRW, and operating profit 232.4 billion KRW, representing increases of 3.1% and 13.4% respectively compared to this year. Researcher Jeong emphasized, "Due to ongoing SG&A expense efficiency efforts since the end of last year, it is expected that profitability improvements will continue next year as well, overcoming the crisis through a higher proportion of digital."

Researcher Jeong evaluated, "With structural improvements, the proportion of traditional advertising businesses such as ATL and BTL has decreased, while the share of digital advertising is expected to increase from 30% in 2017, 34% in 2018, 39% in 2019, to 43% in the third quarter of this year," adding, "The expansion of digital advertising shares in areas such as e-commerce and dot-com business will also be positive for defending profitability."

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