[Click eStock] "Cheil Worldwide, High Growth in Digital Advertising... Attractive Investment Potential"

[Asia Economy Reporter Ji Yeon-jin] IBK Investment & Securities announced on the 2nd that it has given a buy investment opinion and a target price of 34,000 KRW for Cheil Worldwide, as high growth is expected in its digital business and the North American region.

Researcher Lee Hwan-wook of IBK Investment & Securities explained, "Considering that Cheil Worldwide maintains a shareholder return policy with a dividend payout ratio around 60% and is also pursuing additional M&A, we judge its investment attractiveness to be high."

Cheil Worldwide is achieving steady performance growth by generating stable results through agency volumes from its major advertiser Samsung Electronics, while smoothly expanding its digital-centered business. In particular, consumption on online channels accelerated mainly among the MZ generation after the pandemic, and advertisers' demand for marketing with high purchase conversion rates based on data has greatly increased.

It was analyzed that the company's digital proportion has continuously increased from 21% in 2012 to 49% in the first half of this year, demonstrating excellent responsiveness to market demand. Additionally, it is understood that the agency volumes for major advertisers are increasing in the North American region, which currently has an absolutely smaller gross profit scale compared to Europe and China, and is expected to show the steepest growth in the future.

The annual expected gross profit for this year is 1.2385 trillion KRW, a 12.1% increase compared to the same period last year, and operating profit is expected to reach 247.8 billion KRW, a 20.9% increase, achieving the highest performance. With new product launches from major advertisers and continued high growth in digital, gross profit for the headquarters and overseas regions is expected to increase by 10.3% and 12.8%, respectively. Furthermore, due to profitability improvement effects from the expansion of the digital business proportion, the operating profit margin is expected to improve by 0.4 percentage points from the same period last year to 7.9%.

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