[Click eStock] "Innocean, Achievable Gross Profit of 1.3 Trillion Won by 2026"

Daishin Securities analyzed on the 15th that if the ongoing merger and acquisition (M&A) of Innocean is successful, both performance and multiples could be upgraded. They maintained a 'Buy' investment rating and a target price of 30,500 KRW. Innocean's closing price on the 12th was 20,350 KRW.

Kim Hoe-jae, a researcher at Daishin Securities, stated, "Including the 500 billion KRW scale M&A, the gross profit (GP) for 2026 is expected to reach 1.3 trillion KRW," adding, "If the M&A is successful, there is sufficient potential for upward revision of performance." Gross profit refers to the amount calculated by excluding the cost of sales such as outsourcing fees paid to partners in the advertising industry. Innocean's gross profit was 765 billion KRW in 2022 and an estimated 840 billion KRW last year. In October last year, Innocean announced a mid-to-long-term goal of achieving 1.3 trillion KRW in gross profit by 2026 and explained that it would invest 500 billion KRW in M&A, equity investments, and global network expansion.

Innocean's gross profit for the fourth quarter of 2023 is projected to be 240 billion KRW, with an operating profit of 46.4 billion KRW. Compared to the same period in 2022, sales increased by 3%, while operating profit decreased by about 6%. Researcher Kim said, "Although the advertising market has not fully recovered yet, there was a balloon effect where advertisers who were overly conservative in the first half increased their marketing expenditures," adding, "At the Consumer Electronics Show (CES), a record seven Hyundai Motor Group companies participated, and related volumes will be reflected in the fourth quarter of 2023 and the first quarter of 2024."

Regarding Innocean's '2026 Project,' Researcher Kim said, "There is a possibility of a large-scale M&A in the digital sector in the US and Europe in 2024," and added, "Achieving the 1.3 trillion KRW gross profit target for 2026 set by Innocean is fully achievable."