[Click eStock] "Innocean, Differentiated External Growth Amid Unfavorable Market Conditions... Target Price Up"

NH Investment & Securities on the 1st raised the target price for Innocean from 58,000 KRW to 58,000 KRW, considering its differentiated external growth amid an unfavorable industry environment. The investment rating was maintained at 'Buy.'

Researcher Lee Hwajeong of NH Investment & Securities explained, "We revised upward the earnings estimates considering the differentiated external growth amid an unfavorable industry environment," adding, "This is a phase where stable execution by captives (internal affiliates' new car marketing) continues, and recovery in non-captive execution due to proactive workforce investment is also confirmed." However, the trend of increasing costs is expected to continue. Lee said, "Following the acquisition of D'Plan360 and the establishment of a content joint venture (JV), additional mergers and acquisitions (M&A) are also being considered, so the structural cost expansion trend is expected to continue in the second half."

Innocean's second-quarter performance this year was favorable. On a consolidated basis, gross profit increased by 20% year-on-year to 213.5 billion KRW, and operating profit rose by 61% to 41.7 billion KRW, marking an earnings surprise. Lee analyzed, "This is the effect of stable growth in captives combined with recovery in non-captives," adding, "Domestic operating profit recorded a 489% increase to 9.6 billion KRW, and despite the rise in selling and administrative expenses, stable external growth centered on captives was prominent."

Although the advertising market recovery is slow, most related concerns are already reflected in the stock price. Lee emphasized, "Attention should be paid to the fact that the effect of workforce investment (expansion of non-captive execution) is evident even without industry recovery," adding, "This means that investment in new businesses is being carried out efficiently." She also added, "Dividend attractiveness remains valid."

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