[Click eStock] "Cheil Worldwide Shows Clear Improvement Trend in This Year's Performance"

[Asia Economy Reporter Park Jihwan] Korea Investment & Securities forecasted on the 30th that Cheil Worldwide's operating profit for the first quarter of this year will increase by 33.8% year-on-year to 40.8 billion KRW, expecting the performance to continue improving this year. The investment opinion 'Buy' was maintained, and the target stock price was raised by 12.5% from the previous 24,000 KRW to 27,000 KRW.

Researcher Oh Taewan of Korea Investment & Securities analyzed, "The first quarter performance this year is expected to show a gross profit of 266.9 billion KRW, up 3.8% year-on-year, and an operating profit of 40.8 billion KRW, up 33.8%." The gross profit from domestic headquarters and overseas is expected to increase by 7.5% and 2.7%, respectively, during the same period. The headquarters benefits from the early launch effect of Samsung Electronics S21 and new digital advertising contracts with major advertisers, while overseas, North America and China are recovering from the impact of COVID-19, leading to an industry recovery.

Reflecting expectations for industry recovery, the stock prices of global advertising agencies are rising sharply. Since more than 70% of Cheil Worldwide's total gross profit is generated overseas, similar expectations can be reflected. The M&A of digital advertising agencies in advanced markets (North America and Europe), targeted for completion within the year, is also a positive factor. This is because it can internalize the increasing volume of Samsung Electronics' North American advertising.

Researcher Oh stated, "If a company with a gross profit scale of 50 to 100 billion KRW is acquired, it is expected that the company's total gross profit and operating profit will increase by 4 to 8% and 2 to 5%, respectively."

He emphasized, "In the first quarter, the recovery of the domestic and North American markets will be confirmed, and from the second quarter, the recovery of the European market, which accounts for 25% of the gross profit, will appear."

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