[Click eStock] "Nasmedia, A Year Where All Business Divisions Will Grow"

[Asia Economy Reporter Eunmo Koo] DB Financial Investment has raised its target price for Nasmedia from 42,000 KRW to 45,000 KRW, forecasting growth across all business divisions this year.

Shin Eun-jung, a researcher at DB Financial Investment, estimated in a report on the 20th that Nasmedia's sales this year will reach 150.1 billion KRW, a 12.7% increase from last year, and operating profit will grow by 21.8% to 36.2 billion KRW. Specifically, Display Advertising (DA) is expected to grow by 9.8% due to YouTube growth and expansion of Chinese handling volume, Search Advertising (SA) is projected to increase by 8.8% through continuous acquisition of medium to large advertisers to offset low commission rates from major advertisers, and the Mobile Platform is anticipated to grow by 20% with the influx of game advertisers such as Nexon, Pearl Abyss, and Kakao Games. Digital broadcasting, which had been a concern, is expected to stabilize profitability by changing contract terms to a commission-based model after a sluggish performance last year.

The fourth quarter of last year is also expected to show strong results. Researcher Shin estimated that Q4 sales last year increased by 12.7% year-on-year to 31.6 billion KRW, and operating profit grew by 29.6% to 8.5 billion KRW. He explained, “The main driver of strong performance is the recovery of IPTV,” adding, “Normalization and renegotiation of the previously high fixed costs (MG) in Q3 last year are expected to result in a positive turnaround of about 1 billion KRW compared to the previous quarter.” The core business remains robust. Shin estimated that online DA grew by 15.9% year-on-year due to new games like V4 and Moonlight Sculptor, and the mobile platform grew by 69% with new advertiser inflows such as Kakao Games.

The investment opinion remains “Buy,” and the target price has been raised from 42,000 KRW to 45,000 KRW. Researcher Shin stated, “At the current stock price, the price-to-earnings ratio (PER) for this year is only 12.3 times, and considering the industry average PER of 20 times, the valuation attractiveness is sufficient,” adding, “Concerns about uncertainties in IPTV and SA performance that had been suppressing the stock price have been resolved, and this year, significant growth is expected in global handling volumes including China and the United States.”