[Click eStock] "Nasmedia, Positive on OTT Mid-roll Ad Introduction"

Shinhan Financial Investment Report

[Asia Economy Reporter Minji Lee] Shinhan Financial Investment on the 24th issued a buy rating and a target price of 45,000 KRW for Nasmedia.

Nasmedia is expected to benefit from the introduction of mid-roll ads by OTT providers. Major OTT provider Netflix is set to introduce mid-roll ads in November. This means an expansion of the revenue portfolio within the advertising market.

Benefits for advertising platform companies are also anticipated. The current annual transaction volume is estimated to be about 1.2 trillion KRW. From 2023, when new revenue from OTT is expected to be reflected, performance growth is bound to expand further. Digital advertising revenue in 2023 is projected to be 125.1 billion KRW, a 15% increase compared to this year.

Expansion of competitiveness in the market based on data analysis capabilities is also expected. Notable points include the expanded market entry of mobile Ad-Tech technology-based platforms and the volume growth of Nbridge, a CPS advertising specialized platform. Kangho Oh, a researcher at Shinhan Financial Investment, explained, “The growth of the commerce platform K-Deal is also expected to accelerate,” adding, “Next year’s platform revenue is expected to record 52.2 billion KRW, a 32% increase compared to this year.”

This year’s annual operating profit is predicted to increase by 14% from last year to 34.7 billion KRW. Stable growth is expected next year with the expansion of OTT market entry. Next year’s revenue is expected to increase by 19% compared to this year to 177.3 billion KRW, and operating profit is also expected to rise by 23% to 45.9 billion KRW. Researcher Kangho Oh said, “Entry into the mid-roll ad market is an investment point that will drive stable growth in the long term, not just short-term performance growth,” and added, “Acceleration of market entry is also expected through securing references for data analysis.”