[Click eStock] "Cheil Worldwide, 1Q Operating Profit Hits Record High... Strengthening Ad Tech Capabilities"

[Asia Economy Reporter Lee Jung-yoon] NH Investment & Securities maintained a buy rating and a target price of 31,000 KRW for Cheil Worldwide on the 29th, stating that the company's operating profit in the first quarter of this year reached a quarterly record high and that it is strengthening its capabilities related to ad tech (advertising + technology).

Cheil Worldwide recorded a consolidated gross profit of 334.9 billion KRW, up 23% year-on-year, and an operating profit of 58.5 billion KRW, up 43%, in the first quarter of this year.

Researcher Lee Hwa-jung of NH Investment & Securities explained, "Despite uncertain external conditions, with the transition to endemic (periodic outbreaks of infectious diseases), BTL (Below The Line) agency activities have resumed, and overall advertiser budget execution is on the rise. For captive advertisers, performance growth continues due to the effects of new product launches and expansion of digital agency areas, while for non-captive advertisers, growth is driven by acquiring new advertisers and expanding digital agency services for existing advertisers."

Furthermore, Cheil Worldwide is promoting the strengthening of digital ad tech capabilities this year, with specific strategies including content production incorporating extended reality (XR), brand social marketing through digital humans, brand experience zones utilizing metaverse spaces, and brand fandom marketing combined with NFTs (non-fungible tokens).

Cheil Worldwide's labor cost efficiency is also improving. The researcher stated, "Despite an increase in labor costs due to the recruitment of new business personnel, the operating profit margin rose by 2.4 percentage points to 17.5%."