[Click eStock] "Cheil Worldwide Achieves Another Quarterly Record High in Q3"

Increase in Marketing Scale Due to Samsung Electronics' Galaxy Foldable Series Launch
Daishin Securities Maintains Cheil Worldwide Target Price at 34,000 Won

[Asia Economy Reporter Gong Byung-sun] Cheil Worldwide is expected to record its highest quarterly performance again in the third quarter, following the first and second quarters of this year. The intensified competition in the smartphone market, including Samsung Electronics' launch of the new Galaxy Foldable series, is believed to have influenced the performance.

On the 30th, Daishin Securities estimated Cheil Worldwide's gross profit for the third quarter to increase by 19% year-on-year to 333 billion KRW, and operating profit to rise by 14% to 67.8 billion KRW. These figures exceed the market consensus for gross profit and operating profit, which were 312 billion KRW and 66 billion KRW respectively, by 6.73% and 2.73%.

The increase in Samsung Electronics' marketing volume is expected to impact the strong third-quarter performance. Until now, Samsung Electronics has repeatedly launched 2 to 3 new smartphone models annually, but this time introduced the previously unseen Galaxy Foldable series. It is observed that the marketing scale has increased accordingly.

Market competition has also intensified. Apple has made a full-scale entry into the 5G phone market, which Samsung had dominated, since last year. Kim Hoe-jae, a researcher at Daishin Securities, explained, "Apple targeted the gap left by LG Electronics' withdrawal from the mobile business," adding, "The intensified competition and strengthened marketing will lead to an increase in Cheil Worldwide's performance."

Strong performance is also expected in the North American market. Although North America's share of gross profit was not large at 8.2% as of the second quarter this year, Samsung Electronics' agency volume has been steadily increasing. Currently, collaboration is underway with subsidiaries such as Mckinney, TBG, and IRIS.

(Provided by Daishin Securities)

Additionally, the proportion of the digital marketing sector is gradually increasing. The digital share of Cheil Worldwide's gross profit rose from 30% in 2017 to 43% in 2020, and 49% in the second quarter of this year. Researcher Kim said, "Since Samsung Electronics' products are home appliances, the transition to digital marketing is easy."

Accordingly, Daishin Securities maintained its investment opinion of 'Buy' and target stock price of 34,000 KRW for Cheil Worldwide. The closing price on the previous day was 21,850 KRW.

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