[Click eStock] "Cheil Worldwide, Steady Performance... Q4 Operating Profit Up 32% YoY"

[Asia Economy Reporter Park Ji-hwan] Daishin Securities maintained its 'Buy' rating and target price of 28,000 KRW for Cheil Worldwide, stating that steady performance is expected in the fourth quarter of last year as well.

Kim Hoe-jae, a researcher at Daishin Securities, forecasted, "Cheil Worldwide is expected to record operating gross profit (GP) of 350 billion KRW and operating profit (OP) of 67.9 billion KRW in the fourth quarter, representing increases of 10% and 32% respectively compared to the previous year." It is estimated that the headquarters' GP growth slowed compared to the third quarter of last year (an 11% increase year-on-year) due to the fading marketing effect of the Galaxy new product, but in the first quarter of this year, performance is expected to increase by 11% influenced by the earlier-than-usual early January launch of the Galaxy S21.

Regarding overseas GP, it was explained that in Europe, which accounts for the largest share at about 24%, marketing contraction continued due to the resurgence of COVID-19 and shutdowns at the end of the year, resulting in negative growth. However, the second largest market, China, reduced its negative growth in the third quarter to -2% year-on-year, and turned to positive growth in the fourth quarter.

The outlook for product promotion competition among smartphone manufacturers is also positive news. Researcher Kim said, "With the iPhone also launching 5G, the smartphone competition that appeared during the early LTE introduction period from 2011 to 2014 is expected to reemerge," emphasizing, "Recent trends show strategies that expand consumer choice by releasing various products simultaneously."

He added, "Cheil Worldwide's role, which provides total marketing solutions from advertising production to traditional and digital media agency services, could become even more prominent."

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