[Click eStock] "Cheil Worldwide, 2Q Also Records All-Time High Performance... Growth to Continue in Second Half"

[Asia Economy Reporter Myunghwan Lee] IBK Investment & Securities announced on the 15th that it maintains a buy rating and a target price of 37,000 KRW for Cheil Worldwide. It also forecasted that Cheil Worldwide will achieve balanced growth across all global regions centered on digital, posting record-breaking results in the second quarter.

IBK Investment & Securities projected that the company's consolidated gross profit for the second quarter of this year will increase by 18.4% year-on-year to 374 billion KRW, and operating profit will rise by 19.9% to 86.4 billion KRW. This would be the highest quarterly performance ever. With an increase in agency volume for affiliates and a continuous rise in new advertiser agency volume, IBK Investment & Securities expects performance improvements across all global regions for both affiliate and non-affiliate clients.

IBK Investment & Securities forecasted that Cheil Worldwide's headquarters will record a gross profit of 96 billion KRW, up 9.3% from the same period last year, and its subsidiaries will post a gross profit of 278 billion KRW, up 21.9%. It expects steep performance growth across all global regions, especially centered on North America. The gross profit ratio between affiliate and non-affiliate clients is estimated to be about 70% and 30%, respectively, with the digital business proportion exceeding 51%.

Looking at the performance forecast by region, the gross profit in North America is expected to increase by 47.2% year-on-year, continuing its growth trend. Other regions are also expected to record balanced growth: China (26.7%), Europe (11.7%), Southeast Asia (9.2%), Southwest Asia (17.9%), Latin America (24.7%), and the Middle East (22.0%).

With the expansion of agency areas beyond Samsung Electronics' wireless division to include home appliances, steady performance growth for affiliate clients is expected. The volume of advertiser agency for non-affiliate clients is also expected to expand alongside the growth of digital platform operations and e-commerce business.

Jung Hwanwook, a researcher at IBK Investment & Securities, said, "Despite concerns about an economic downturn, Cheil Worldwide's performance growth in the second half is expected to be solid," adding, "As advertisers' needs for efficient marketing increase, preference for agencies that demonstrate excellent digital response capabilities every quarter will further rise."

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