[Click eStock] "Jeil Gicheok Led Global High Growth... Target Price Up"

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[Asia Economy Reporter Myunghwan Lee] Kiwoom Securities announced on the 12th that it maintains a buy rating on Cheil Worldwide and has raised the target price from 32,000 KRW to 35,000 KRW. This is due to expected performance improvements based on growth in overseas markets.

Kiwoom Securities forecasts that the company's gross profit for the first quarter of this year will increase by 11.1% year-on-year to 301.5 billion KRW, and operating profit will rise by 40.9% to 57.7 billion KRW. This is said to be in line with market expectations. The resumption of offline events at global events such as the Consumer Electronics Show (CES) and Mobile World Congress (MWC) has improved the BTL segment, and the effects of the Beijing Winter Olympics and digital concentration appear to have helped the company overcome the advertising off-season.

Looking at gross profit by region, domestic gross profit is estimated to increase by 2.6% year-on-year to 66.6 billion KRW, and overseas gross profit by 13.8% to 235 billion KRW, showing balanced growth across all regions. In particular, the growth momentum in North America, which showed a high growth rate of 52.5% year-on-year in 2021, is expected to continue this year.

Kiwoom Securities expects Cheil Worldwide's total gross profit for this year to grow by 7.7% year-on-year, with overseas gross profit increasing by 8.5%. The increase in digital advertising and the gradual recovery of BTL are expected to drive growth both domestically and internationally. By region, double-digit growth is expected to continue in North America and China, with resilient improvements in Europe and sustained expansion in Latin America and other Asian regions.

Researcher Namsu Lee of Kiwoom Securities evaluated, "Preparations are progressing excellently, including a successful transition to digital business, non-affiliated expansion based on core agency performance of major advertisers, and high growth in North America, the largest global advertising market." He added, "The recovery speed of BTL, which has emerged from the shadow of COVID-19, is increasing, and the foundation for new business in the metaverse is also steadily progressing."

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