[Click eStock] "Cheil Worldwide Posts Solid Performance Despite Adverse Conditions"

[Asia Economy Reporter Park Jihwan] Samsung Securities maintained its investment opinion of 'Buy' and a target price of 26,000 KRW for Cheil Worldwide on the 6th, stating that the company posted solid performance despite unfavorable business conditions.

Choi Minha, a researcher at Samsung Securities, said, "Cheil Worldwide's operating profit in the fourth quarter is expected to increase by 23% compared to the same period last year," adding, "Although the growth rate in scale is expected to be lower than initially anticipated due to deteriorating domestic and international business environments at the end of the quarter, profit improvement through cost efficiency is expected."

He noted, "Since December, recovery has slowed down especially in Europe and India, as well as domestically, due to the resurgence of COVID-19," and diagnosed, "The expectations for fourth-quarter performance should be lowered compared to initial forecasts." Although the profitability improvement effect from cost efficiency continued, the analysis shows that the increase rate of gross profit compared to the same period last year has decreased more sharply than the previous quarter.

However, this year, in addition to the base effect, both affiliated and non-affiliated sectors are expected to lead external growth through digital transformation. Researcher Choi emphasized, "We are actively considering M&A that can strengthen capabilities in growth areas such as digital and data, and if successful, additional performance improvements are possible."