[Click eStock] "Cheil Worldwide Meets 2Q Earnings Expectations... High Growth Possible in Second Half"

[Asia Economy Reporter Lee Jung-yoon] DB Financial Investment maintained a buy rating and a target price of 34,000 KRW for Cheil Worldwide on the 14th, stating that the company's second-quarter earnings this year are in line with consensus estimates and that high growth is possible in the second half of the year.

Cheil Worldwide's second-quarter gross profit is expected to reach 376.6 billion KRW, a 19.2% increase year-on-year, and operating profit is forecasted at 86.9 billion KRW, up 20.5%, meeting consensus expectations. In particular, overseas subsidiaries' gross profit (GP) is expected to grow strongly by 22% compared to the previous year. Overall, BTL (Below The Line) volume is increasing in Europe and other regions, while in the Americas, the effect of attracting large non-affiliated advertisers such as Blue Diamond and the continued demand for digital agency services from major advertisers since last year have been analyzed.

Cheil Worldwide's performance in the second half of the year is also expected to achieve high growth. Although there are concerns about reduced media spending by domestic and international advertisers due to the recent global economic downturn, the proportion of ATL (Above The Line) advertising, which uses traditional media, accounts for less than 20% of total GP. BTL and digital advertising, which have relatively higher shares, are expected to perform well.

Furthermore, influenced by the recent reopening, BTL is expanding, and demand for digital content production is increasing for both affiliated and non-affiliated clients, mainly in Korea and the Americas. Shin Eun-jung, a researcher at DB Financial Investment, explained, "Recently, a dedicated performance marketing team was established, operating major product live commerce both domestically and internationally, which is considered a promising new growth point." Cheil Worldwide's third-quarter gross profit is expected to increase by 12.2% year-on-year to 365.6 billion KRW, and operating profit is forecasted to rise 15% to 80.7 billion KRW.

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