[Click eStock] "Incross Posts Earnings Exceeding 3Q Outlook... Momentum Expected to Strengthen"

[Asia Economy Reporter Myunghwan Lee] Kiwoom Securities announced on the 3rd that it maintains a buy rating and a target price of 24,000 KRW for Incross. The company also assessed that Incross would benefit directly from the online video service (OTT) advertising market, providing abundant momentum.

Incross's sales in the third quarter of this year recorded 13.9 billion KRW, a 6.6% increase compared to the same period last year, while operating profit was 6 billion KRW, a 0.5% decrease. These figures exceeded initial market expectations.

Kiwoom Securities pointed out that the expansion of transaction volume in the media rep and T Deal contributed to a 16.6% growth in quarterly handling volume compared to the same period last year. In the media rep sector, digital advertising execution by major advertisers in gaming, e-commerce, food and beverage, and telecommunications increased, and with the rise in demand for performance advertising, digital growth is evident, suggesting that the media rep's solid performance will continue. T Deal's performance improvement is linked to the effects of planned events like Time Deal and the expansion of MD, resulting in scale growth. Since Incross's business is structured on a net sales basis, the cost burden from sales growth is not significant, indicating that the performance improvement trend will continue.

Kiwoom Securities assessed that Incross would directly benefit from the recent introduction of advertising plans by major OTT platforms such as Netflix and Disney Plus. These platforms are reportedly preparing to introduce advertising plans that lower fees in exchange for displaying ads during video viewing. As new digital advertising platforms emerge, securing slots for advertisers is essential. Incross covers captive OTT Wave and the DMP (Data Management Platform) area simultaneously, making direct benefits from the OTT advertising market possible, according to Kiwoom Securities.

Researcher Namsu Lee of Kiwoom Securities said, "The handling volume of the media rep, which showed a sluggish performance in the first quarter, rose for two consecutive quarters, proving that there was no decrease in advertiser budgets," and added, "Even considering only organic growth in 2023, T Deal's transaction volume is expected to exceed 200 billion KRW, further strengthening sales and profitability."