Won Jeonghwan, Head of Management Support at Incross, Interview
"We Will Receive Fair Valuation Through Performance Recovery"
Won Jeonghwan, Head of the Management Support Division at Incross, stated in a recent interview with Asia Economy, "We anticipate tangible results not only from the growth of our existing advertising business but also from new ventures such as the Stellize platform and commerce," expressing his optimism.
Incross provides media sales agency and media planning services in the digital advertising market. The company also operates a commerce business that offers one-stop services, including planning, building, developing, and operating commerce platforms. Last year, Incross recorded sales of 48.8 billion KRW and an operating profit of 10 billion KRW. While sales increased by 4.27% year-on-year, operating profit declined by 20.63%.
Won explained, "The digital advertising market, which boomed during the COVID-19 pandemic, saw a decrease in advertising volume as the pandemic ended, leading to a decline in performance. However, since last year, the company has shifted back to a growth trajectory, resulting in improved performance." He added, "Although last year's operating profit decreased due to one-off expenses, excluding these costs, we are showing a growth trend."
Incross expects this trend of improved performance to continue this year. The company anticipates positive results in the advertising market, supported by the early presidential election. He said, "The digital advertising market we are in is expected to grow by more than 5% compared to last year. Although the macroeconomic environment is not favorable, if we look at just the first quarter, it has improved compared to last year, and with the presidential election, the business atmosphere is not bad."
In the advertising sector, the comprehensive advertising agency (AOR) business, which began in the second quarter of last year, is expected to be the main driver of growth. AOR refers to a specialized media agency managing both online and offline media on an integrated basis. Won noted, "Despite being launched for the first time last year, the AOR business achieved significant growth in media advertising volume. We expect rapid growth to continue this year as well."
The commerce business is following a similar trajectory. Previously, Incross conducted its commerce business solely through T Deal. However, the company is expanding its commerce operations, launching 'Hyundai Shop' with Hyundai Motor Company last November and 'Homeniq' with Samsung C&T this year. He added, "We have several additional projects planned for this year. As we have accumulated sales know-how over time, the leverage effect will be significant."
Incross is particularly looking forward to the results of its artificial intelligence (AI) PPL platform, Stellize. Stellize is a platform that connects advertisers with creators. For example, if an advertiser inputs criteria such as camping, target age group, and budget, the platform matches them with suitable creators. Currently, more than 200 creators have joined the platform. Although it is currently operating in a closed beta, it is scheduled to officially launch in August this year.
He said, "Stellize is a platform that optimizes PPL placements according to the advertiser's needs."
Incross emphasizes that the biggest advantage of Stellize is time savings. In the past, executing PPL required a lengthy process, from selecting an agency to preparing proposals. However, by utilizing Stellize, this process can be significantly shortened. The company also explains that it enables tailored PPL for each business sector. "There is definitely demand for PPL even in niche areas," he said. "In such cases, instead of having to find a major creator, you can easily identify creators who fit the specific advertisement, making the process much more efficient."
There are also benefits for advertisers. Traditionally, it was difficult to measure the exact effectiveness of PPL after spending the advertising budget. However, with Stellize, Incross directly prepares reports and informs advertisers of the changes that occur after the campaign, allowing them to directly confirm the 'effectiveness of their spending.'
At the same time, the company plans to work on enhancing shareholder value. Currently, Incross's stock price has been on a downward trend year-on-year. He emphasized, "In the past, the price-to-earnings ratio (PER) for the advertising industry was 20 to 30 times, but now it is less than 10 times. From the company's perspective, we believe the current stock price is at a historical low."
He continued, "We are aware that even if we insist our stock price is low, it means nothing unless the market recognizes it. Since performance recovery comes first, our goal is to improve this aspect so that the market can acknowledge us." He added, "Currently, Incross has expanded its business beyond advertising to include platforms and commerce. We aim to achieve results in each sector and, through this, receive a PER appropriate for each business, ultimately being recognized as a growth stock."
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