[Click eStock] "Incross to Continue Overwhelming Growth This Year... Target Price Up"

[Asia Economy Reporter Eunmo Koo] Shinhan Financial Investment forecasted that Incross will continue its overwhelming growth this year. The investment opinion was maintained as 'Buy,' and the target stock price was raised from the previous 64,000 KRW to 68,000 KRW.

Shinhan Financial Investment estimated that Incross's Q4 revenue last year reached 12.1 billion KRW, a 12.8% increase compared to the same period last year, and operating profit rose by 26.7% to 5.4 billion KRW, recording the highest quarterly performance in history that meets market expectations. The cash cow, media rep sales, were projected to increase by 9.3% to 9.5 billion KRW. On the 15th, researcher Sejong Hong of Shinhan Financial Investment stated in a report, "This quarter will continue to benefit from the recovery of the domestic advertising market," adding, "The advertising spending of existing game advertisers will be supplemented by the recovery of advertising expenses from businesses affected by COVID-19."

The key T-Deal revenue was expected to be around 900 million KRW. Researcher Hong evaluated, "This is a business unit showing double-digit monthly growth, and in the first quarter of this year, it is expected to contribute at least 1 billion KRW in profit," adding, "Since the SKU (stock keeping unit) has recently increased sharply, there is no need to lower expectations for this year at all."

For the first quarter of this year on a consolidated basis, revenue is expected to be 8.6 billion KRW, a 26.8% increase compared to the same period last year, and operating profit is expected to rise by 88.1% to 3.1 billion KRW. This is the first quarter since Q1 2018 with a revenue growth rate exceeding 20%. Media rep sales were estimated at 5.8 billion KRW. Researcher Hong forecasted, "There is a reverse base effect in January and February, but conversely, there is a base effect due to COVID-19 in March," and added, "Efforts to improve SG&A efficiency will continue."

Additionally, T-Deal revenue was estimated at 1.3 billion KRW. Researcher Hong said, "Considering that this business was launched at the end of April last year, this quarter can fully enjoy high growth," and predicted, "Thanks to T-Deal's profit contribution, the company's operating profit margin is expected to rise to 35.7% even in the off-season." He further evaluated, "Conservatively, T-Deal's revenue this year is expected to increase by 278% compared to the same period last year to 7.6 billion KRW, and depending on the business conditions, it is quite possible to exceed 10 billion KRW."

The investment opinion was maintained as 'Buy,' and the target stock price was raised from the previous 64,000 KRW to 68,000 KRW. Researcher Hong explained, "This is a business justified by a high multiple due to growth exceeding 20% and rapidly improving profitability," and added, "It is necessary to use the recent stock price adjustment caused by the concentration on large-cap stocks as a buying opportunity."

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