[Click eStock] "Innocean, Undervalued Phase... Expecting Solid Performance Next Year"

DB Financial Investment Report

[Asia Economy Reporter Minji Lee] DB Financial Investment maintained a buy rating and a target price of 82,000 KRW for Innocean on the 28th. Although the stock price has been fluctuating and declining in an undervalued phase, it is judged that favorable performance is expected due to the expansion of new car campaigns next year.

Innocean's expected gross profit for the fourth quarter is 179.3 billion KRW, a 6% increase compared to the same period last year, and operating profit is expected to be 39.7 billion KRW, a 4% decrease. The decline in operating profit is estimated to be due to a high base effect from the same period last year. Shin Eun-jung, a researcher at DB Financial Investment, said, "The peak advertising season effect in the fourth quarter was reflected both domestically and internationally, and BTL growth is also expected due to events such as the Seoul Mobility Show," adding, "New car campaigns will include the G90 and Casper."

Next year, both domestic and international marketing for the Genesis brand, expansion of the N line, promotion of electric vehicle lines, and new car campaigns for models such as the Grandeur, Sonata, and Palisade are planned. It is judged that, similar to this year’s record-high performance achieved through various campaigns, operating profit will increase by 11% to 146.9 billion KRW next year.

Researcher Shin said, "The acquisition of Deeperple and online sales of Casper are gradually increasing the digital portion, which had been lacking for the company, and this will be a key point to watch next year," adding, "Growth in the digital sector through additional mergers and acquisitions is also expected."

So far, Innocean’s stock price has fluctuated and declined due to reasons such as exclusion from the KOSPI 200, uncertain earnings outlook, and neglect in the advertising sector despite continuous new car launches. However, the company’s current stock price is judged to be excessively undervalued with a price-to-earnings ratio (PER) of 11.6 times based on next year’s earnings. Researcher Shin explained, "With solid performance, the company will conduct its first interim dividend this year and maintain the increased DPS of 1,800 KRW from last year," adding, "It is necessary to watch the company from the perspectives of performance, dividends, and undervaluation."

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