[Click eStock] "EcoMarketing, Core Business Slumps Amid Difficult Sales Environment... Target Price Down"

NH Investment & Securities announced on the 4th that it is lowering the target price for Eco Marketing to 13,000 KRW due to a challenging business environment.

In a report on the same day, researcher Lee Hwajeong of NH Investment & Securities explained, "Due to recent concerns about economic slowdown, advertisers continue to adopt a conservative spending approach, and consumer sentiment is also in a weakened phase," adding, "As a result, market investment sentiment is also frozen."

Researcher Lee Hwajeong pointed out, "Although Eco Marketing has strengths in digital performance marketing and is relatively less sensitive to economic fluctuations, it cannot be completely free from the impact of the economic slowdown. Brands such as Cluck and Andar are maintaining stable performance by aiming for an increase in ASP (average selling price) through new product launches, but there is still no strong trigger to cause a stock price rebound."

Lee analyzed, "What Eco Marketing currently needs is momentum such as the visible global expansion of existing brands and the full-scale business boosting of market-leading products that pioneer previously untapped markets."

Accordingly, he lowered Eco Marketing's target price by 21%, from the previous 16,500 KRW to 13,000 KRW. This is because he significantly downgraded earnings estimates for both the core business and subsidiaries. He explained that advertiser spending is slowing down overall due to concerns about the economic slowdown, and consumer sentiment is also weakening.

He analyzed, "Eco Marketing's consolidated sales and operating profit for Q1 are expected to meet the lowered consensus at 68.8 billion KRW and 9.2 billion KRW, respectively. However, since client orders for Japan are expected to ramp up in Q2, a performance pattern of a weak first half and stronger second half is anticipated."