(Provided by Cheil Worldwide)

Cheil Worldwide raises first quarter operating profit target…

(Provided by Cheil Worldwide)

Cheil Worldwide achieved record-high earnings as of the first quarter. Cheil Worldwide announced on April 28 that it recorded a gross profit of 334.9 billion won and an operating profit of 58.5 billion won in the first quarter of this year. Gross profit and operating profit increased by 23% and 43%, respectively, compared to the same period last year, the highest in the first quarter.

All business divisions, including digital, ATL (traditional media advertising), and BTL (non-media advertising), grew compared to the previous year. In particular, it is noteworthy that the proportion of digital business has increased to 51% of the total business. In all regions at home and abroad, digital performance grew by 31% thanks to the expansion of digital agency volume and diversification of digital service areas. The headquarters and major digital subsidiaries (Pengtai, Barbarian) achieved results based on their respective specialized fields such as performance marketing, platform operation, and e-commerce. The U.S. subsidiary led digital content production, while Southeast Asia led digital growth centered on e-commerce and performance marketing.

The proportion of overseas business in the first quarter of this year was 77%, an increase of 3 percentage points from the previous year. In particular, North America recorded an annual growth rate of 53% last year, followed by a 63% year-on-year growth in the first quarter of this year. The high growth in North America can be attributed to the increase in the amount of agency for existing advertisers and the expansion of the agency for new businesses in the digital field.

Meanwhile, on April 29, Cheil Worldwide closed at 25,300 won, down 0.2% from the previous day. However, brokerage firms are rather raising their target price.

Kiwoom Securities raised its target price to 35,000 won from 32,000 won, saying that Cheil Worldwide’s earnings improvement is expected based on the growth of the overseas market. The investment recommendation is ‘buy’. Kim So-hye, an analyst at Hanwha Investment & Securities, said, “It is time for Cheil Worldwide to give a valuation appropriate for growth stocks, not defensive stocks,” and suggested a target price of 36,000 won.

Meanwhile, Cheil Worldwide is aiming for more than double-digit growth in gross profit this year by expanding marketing services and expanding new digital businesses such as Metaverse and NFT. To this end, since the beginning of the year, it has been continuously promoting mergers and acquisitions (M&A) and equity investment, securing digital manpower and building specialized organizations using about 470 billion won in net cash.

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