[Click eStock] "Cheil Worldwide Shows Strong Q3 Performance with Rapid Recovery"

Daishin Securities Issues 'Buy' Investment Opinion and Sets Target Price at 28,000 Won... Closing Price on 20th at 21,750 Won

[Asia Economy Reporter Kum Boryeong] Cheil Worldwide showed strong third-quarter performance as the market recovery, centered on domestic and digital sectors, appeared faster than expected.

According to Daishin Securities on the 21st, Cheil Worldwide's third-quarter operating profit increased by 12.8% year-on-year to 59.4 billion KRW.

Kim Hoejae, a researcher at Daishin Securities, explained, "The third quarter is usually an off-season for advertising, but marketing activities by advertisers who were sluggish in the first half resumed, resulting in strong performance. The operating profit is the highest ever for the third quarter."

The headquarters held three Galaxy online unpacking events for Samsung Electronics. The strengthened TV advertising campaigns accompanying the simultaneous launch of five Galaxy products are interpreted as having contributed to the improved performance.

In North America, Samsung's agency business increased due to the establishment of the Dallas branch in 2019, showing an 11% increase in the first half compared to the previous year. This was the best performance among overseas regions. In the third quarter, Samsung's agency business increased by 30% year-on-year.

Strong performance is also expected in the fourth quarter. Researcher Kim said, "The iPhone 12, the biggest competitor to Samsung Galaxy Note20, will be released in Korea on the 30th. This is the first time in 10 years since the iPhone 3GS landed in Korea in 2009 that Korea has been included as a first-tier launch country, so the iPhone will be released faster than expected." He added, "The prices are also cheaper, with the iPhone 12 mini at 950,000 KRW and the iPhone 12 at 1,090,000 KRW, compared to the Note20's 1,200,000 KRW, so Samsung Electronics is expected to strengthen marketing to counter the iPhone 12."

He continued, "In particular, Cheil Worldwide plays an important role because it provides a total solution that derives optimal marketing results by efficiently allocating advertisers' budgets to advertising production and media execution, and within media, between traditional and digital media."

Daishin Securities gave Cheil Worldwide a 'Buy' investment rating with a target price of 28,000 KRW. The closing price on the 20th was 21,750 KRW.