[Click eStock] Nasmedia, Expected Stable Earnings Growth

[Asia Economy Reporter Lee Seon-ae] Eugene Investment & Securities announced on the 4th that it maintains a Buy rating and a target price of 50,000 KRW for Nasmedia. This is because the company is expected to achieve stable earnings growth in line with market expectations.

Researcher Park Jong-sun of Eugene Investment & Securities explained, "Our estimated Q4 consolidated earnings forecast sales of 33.6 billion KRW and operating profit of 11.3 billion KRW, representing increases of 5.1% and 7.2% respectively compared to the same period last year, maintaining a growth trend. We expect profitability to continue improving amid ongoing growth in online advertising and mobile platform transaction volume."

He added, "We maintain a Buy rating as the target price and 43.3% upside potential (valuation gap of 30.2%) remain intact. Based on our 2021 estimated earnings per share (EPS) of 2,852 KRW, the price-to-earnings ratio (PER) stands at about 12.2 times, trading at a discount compared to the domestic peers and major clients’ average PER of 16.2 times."

Meanwhile, the recently announced Q3 preliminary consolidated results showed sales of 30.9 billion KRW and operating profit of 8.1 billion KRW, up 10.8% and 29.7% respectively from the same period last year. Both sales and operating profit were in line with market consensus (sales 30.9 billion KRW, operating profit 8.2 billion KRW).

A positive aspect of the Q3 results is that despite the ongoing COVID-19 situation, sales growth continued and profitability improved. Although digital broadcasting and digital signage sales decreased by 4.5% and 82.5% respectively compared to the same period last year, online DA (Display AD) sales increased by 19.4% due to sustained volume from game and home appliance advertisers and the influx of many new advertisers in shopping mall, fashion, and healthcare sectors. Online SA (Search AD) sales also rose 12.3% year-on-year as large advertiser transaction volumes recovered and new advertiser volumes were continuously secured. Additionally, mobile platform sales increased by 30.7% year-on-year due to the expansion of performance platforms and securing numerous new CPS campaigns mainly in the shopping mall sector.