[Click eStock] "Innocean, Still Undervalued Despite Strong Earnings"

[Asia Economy Reporter Park Jihwan] Heungkuk Securities evaluated that Innocean remains in an undervalued phase despite its strong performance. They maintained a 'Buy' investment rating and a target price of 75,000 KRW.

Innocean's third-quarter results are expected to show a very favorable performance. The projected gross profit for Q3 is 162.8 billion KRW, a 13.6% increase year-over-year, and operating profit is expected to rise by 30.7% to 35.3 billion KRW. Researcher Hwang Seongjin of Heungkuk Securities stated, "While the domestic media-centered advertising market is showing a positive trend, brand marketing for the Genesis lineup continues, and the increased marketing demand due to strong sales in the Americas region is being reflected."

He believes that the favorable business environment continues, and the strong performance is translating into expanded shareholder returns. Researcher Hwang emphasized, "With the new car cycle continuing, the underlying growth trend is expected to be maintained, and the operating contributions from the internalized Welcome Group and Deeperple through mergers and acquisitions (M&A) will steadily expand."

Gross profit is expected to increase by 4.7% year-over-year to 176.9 billion KRW, but operating profit is forecasted to decrease by 6.9% to 38.5 billion KRW. Attention should be paid to the expansion of shareholder return policies based on strong performance. Despite a decrease in earnings last year, Innocean expanded its dividend payout ratio to around 56%.

Researcher Hwang emphasized, "Considering the growth trend in performance, the cash holdings exceeding 600 billion KRW, the possibility of additional M&A based on this, and the ongoing expansion of shareholder return policies, the current stock price is judged to remain in a significantly undervalued phase."