[Edaily Reporter kyoungeun kim ] Shinhan Investment Securities announced on the 17th that it is maintaining its “Buy” rating on CheilWorldwide(030000)but has lowered its target price from 24,000 won to 21,000 won. This adjustment reflects a slowdown in growth as major advertisers intensify and prolong their efforts to streamline marketing.
Ji In-hae, a research analyst at Shinhan Investment Securities, stated in a report released that day, “The growth story is expected to remain lackluster for the time being,” adding, “While the 6.5% dividend yield supports the stock’s floor, a full-fledged stock price rebound will take time.”
Shinhan Investment Securities revised downward its forecasts for gross profit and net income compared to previous estimates—by 2.2% and 14.7%, respectively, for 2026, and by 3.6% and 17.8%, respectively, for 2027. Research Analyst Ji explained the rationale, stating, “This is because the major advertiser’s aggressive push for marketing efficiency will continue through next year, and the burden of artificial intelligence (AI) investments is also increasing.” Accordingly, gross profit for 2026 is projected at 1.87 trillion won (a 0.7% increase year-over-year), while net profit is forecast at 282.8 billion won (a 16.1% decrease year-over-year, accounting for 15.1% of gross profit).
He predicted, “Gross profit will remain at a similar level as the expansion of non-affiliated advertising volume performs well, and the company’s direct-to-consumer (DTC) segment continues to perform steadily—driven by the expansion of Samsung.com and the success of long-term contracts with major brands such as Philip Morris.” However, he assessed that “it has become difficult to meet the previous guidance of 5% growth in gross profit and maintaining the prior-year operating profit margin (18.1%).”
In particular, it was determined that third-quarter earnings were significantly impacted by the full-scale implementation of budget controls—despite the launch of a new flagship product—coupled with the strengthening of the Korean won. Research Analyst Ji stated, “Third-quarter operating profit is expected to be 77.2 billion won, a 19.5% year-over-year decrease,” adding, “The company aims to return to moderate growth by 2027, driven by performance in non-affiliated businesses, DTC, and B2B AI solutions.”
Shinhan Investment & Securities estimates CheilWorldwide’s third-quarter gross profit at 434.6 billion won (down 11.2% from the previous quarter and 5.0% year-over-year). Operating profit is projected to be 77.2 billion won, down 16.7% from the previous quarter and 19.5% year-over-year. This figure is 23.4% below the market consensus of 100.8 billion won.