[Edaily Reporter KIM YOON-JEONG ] HEUNGKUK METALTECH CO.,LTD. forecast that CheilWorldwide(030000)’s earnings will return to normal as one-time costs in the second quarter subside. The firm also cited the streamlining of AI-based ad production and the expansion of non-affiliated businesses as drivers of mid- to long-term growth.

On the 9th, Hwang Seong-jin, an analyst at HEUNGKUK METALTECH CO.,LTD., stated, “Second-quarter earnings are expected to recover to previous years’ levels,” adding, “The appeal derived from stable earnings and growth potential is a positive investment point.”
Heungkuk Securities projected that CheilWorldwide’s second-quarter gross profit would rise 2.6% year-over-year to 496.2 billion won, while operating profit would increase 1.2% to 93.2 billion won.
Analyst Hwang explained, “Earnings, which were sluggish in the first quarter due to an increase in retirement provisions and one-time efficiency costs associated with the structural reorganization of overseas operations, have returned to normal margin levels,” adding, “Despite external factors such as efforts to streamline captive operating expenses and the withdrawal from the Chinese home appliance business, the expansion of coverage through the provision of total marketing solutions and strong performance in non-affiliated segments had a positive impact.”
By region, the company forecast continued growth, particularly in North America and Shinhung. Analyst Hwang noted, “The trend of expanding coverage in North America and Shinhung is continuing, and digital transformation and retail demand are also on the rise,” adding, “In Europe, the profitability of subsidiaries is gradually improving, while in China, the business structure is undergoing a transition due to the withdrawal from the home appliance division.”
He added, “The China business is expected to expand beyond traditional advertising into entertainment-related areas, and the trend of expanding into non-affiliated sectors is also continuing.”
There is also a growing consensus that the use of AI is gaining momentum. Analyst Hwang said, “We are utilizing AI solutions to enhance the efficiency of ad production and maximize creative capabilities, while also pursuing a strategy to expand new businesses by providing customized solutions to clients,” adding, “It is important to pay attention to the long-term growth trend and its alignment with shareholder returns.”
He continued, “The company will maintain its proactive shareholder return policy, targeting a dividend payout ratio of 60% by 2027,” adding, “The company also plans to repurchase and cancel approximately 12% of its shares, though the timing has not yet been determined.”
HEUNGKUK METALTECH CO.,LTD. maintained its “Buy” investment rating and target price of 26,000 won for CheilWorldwide.