[Click eStock] "EcoMarketing Forecasts Record High Earnings in Q2"

[Asia Economy Reporter Eunmo Koo] Hana Financial Investment has forecasted that Eco Marketing will achieve record-breaking performance in the second quarter of this year and has raised its target stock price from 44,000 KRW to 49,000 KRW.

On the 9th, Hana Financial Investment raised the target stock price for Eco Marketing. In a report on the same day, researcher Kihoon Lee of Hana Financial Investment stated, "We reflected the upward revision of earnings estimates and Gluga's equity-method profit in the SOTP valuation. Although the first quarter results were sluggish due to COVID-19, it is expected that record-breaking performance will begin from the second quarter, and the changes in the advertising industry triggered by Naver and Kakao are also positive." It was also evaluated that the momentum for performance and valuation expansion in the second half is becoming visible, such as Ohora ranking first in the nail category on Japan's Rakuten.

Sales in the second quarter of this year are estimated at 44 billion KRW, a 77% increase compared to the same period last year, and operating profit is expected to grow by 65% to 13.4 billion KRW. By segment, on a separate basis, sales are projected to increase by 37% to 12.5 billion KRW, and operating profit is expected to rise by 36% to 6.6 billion KRW, achieving record-breaking performance. Researcher Lee said, "Not only is online advertising rapidly recovering, but the CPS sales of 'Gluga (Ohora)', which involves core marketing capabilities, are estimated to contribute significantly." The subsidiaries are also expected to record record-breaking performance with sales of 31.6 billion KRW and operating profit of 6.8 billion KRW, respectively. Additionally, he added, "The resumption of TV advertising by 'Clock' has revealed a longer-than-expected product cycle, and sales of 'Monje (mattress)', which is entering the summer peak season, are also growing rapidly."

The changes in the advertising industry driven by Naver and Kakao are also evaluated positively. Researcher Lee explained, "The core of performance marketing is ultimately to maximize advertisers' sales or key indicators through low advertising expenditure," and added, "In line with this trend, over the past five years, Eco Marketing's advertising media have diversified from reliance on Naver to evenly utilizing various media such as Kakao, Google, and Facebook." He continued, "Recently, advertising media that will bring changes to the industry, such as Naver's Smart Channel and Kakao's Biztalk, have been added," and forecasted, "If advertising demand for these media increases, the price of ad space will rise, and eventually, advertising demand will concentrate on performance marketers who can deliver more overwhelming results."