[Click eStock] "Ecomarketing, Performance Improvement Expected from Subsidiaries and New Business Success"

DB Financial Investment Report

[Asia Economy Reporter Minji Lee] DB Financial Investment maintained a buy rating and a target price of 24,000 KRW for Eco Marketing on the 13th. Although the stock price had a sluggish trend last year due to the reflection of Andar Noise, it is expected that earnings will improve this year thanks to the performance of subsidiaries and new businesses.

Eco Marketing recorded sales of 71.6 billion KRW in the fourth quarter of last year, a 70.5% increase compared to the same period last year. Operating profit is expected to decline by 9% to 11 billion KRW, significantly below market expectations (12 billion KRW). Headquarters sales are expected to decrease by 19% compared to the same period last year to 10.7 billion KRW due to the off-season of Ohora and a reduction in CPS. Daily&Co's sales are expected to grow by 9.8% year-on-year to 31.6 billion KRW, driven by steady sales growth of Mongje, Titad, and Cluck. Andar is expected to record sales of 33.7 billion KRW and operating profit of 2.7 billion KRW, reflecting the winter peak season effect, representing a 24% and 139% increase respectively compared to the previous quarter.

This year, revenue is expected to increase significantly as Ohora and Andar contribute to CPS. Daily&Co is anticipated to benefit from the launch of new products by Cluck and the global sales expansion of Vanity Table, while Andar is expected to normalize its business and increase global sales. Accordingly, sales for this year are projected to reach 327.1 billion KRW, and operating profit 63.1 billion KRW, representing increases of 30% and 72% respectively compared to last year.

Shin Eun-jung, a researcher at DB Financial Investment, said, “The operating profit forecast for Andar this year was only slightly revised downward,” adding, “Considering that earnings will normalize, the current price-to-earnings ratio (PER) of 10.5 times is analyzed to be very undervalued.”

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