[Click eStock] "Cheil Worldwide: Expected Dividend Yield at 6%... Also Holds Treasury Shares"

On September 19, DB Financial Investment stated that it is maintaining its 'BUY' investment opinion on Cheil Worldwide, citing a high year-end expected dividend yield of 6.3% and the company's 12% treasury stock holdings.

Shin Eunjeong, a researcher at DB Financial Investment, analyzed, "Cheil Worldwide's gross profit for the third quarter is expected to be 447.5 billion won, up 4.4% year-on-year, while operating profit is projected to decrease by 3.9% to 91.8 billion won, falling short of the market consensus of 96.6 billion won." She added, "The gross profit at headquarters is expected to decline by 1.8% year-on-year due to the disappearance of non-affiliate volume and the impact of the Paris Olympics, resulting in negative growth."

She further explained, "The domestic advertising market appears to still be at its bottom rather than in recovery," and added, "Although overseas gross profit is expected to increase by 6.3%, growth will likely slow due to the efficiency improvements in marketing execution by major captive clients, despite the positive effects of M&A activities in North America and India."

However, performance in the fourth quarter is expected to improve. Shin noted, "Headquarters' results last year saw increased costs due to incentive payments and a low profit base as there was virtually no domestic advertising in December following the impeachment and the Muan disaster," and projected, "Therefore, in the fourth quarter, domestic gross profit could increase by 3.2%, making a sufficient recovery in performance possible." The overseas segment is also expected to continue growing, particularly in the Americas. Accordingly, fourth-quarter gross profit is expected to reach 488.3 billion won (up 7.4%), and operating profit is forecast at 96.1 billion won (up 16.6%).

Although controlling net income in the first half fell by 26.3% due to foreign exchange losses and convertible bond valuation losses, Shin emphasized, "With a low base in the fourth quarter (including the amortization of Iris goodwill of 30 billion won), annual controlling net income is expected to grow by 2%, so there is no need to worry about a reduction in DPS."

The dividend appeal is also high. Cheil Worldwide's expected dividend yield in December is about 6.3%. Shin stated, "DPS for 2025 is expected to be 1,250 won, and with 12% treasury stock holdings, we are maintaining our BUY investment opinion."

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