[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 6th that it is maintaining its “Buy” rating on CheilWorldwide(030000)but lowering its target price from 24,000 won to 23,000 won.

Lee Hwa-jeong, an analyst at NH INVESTMENT & SECURITIES, explained, “While the annual earnings slump caused by external uncertainties is disappointing, it is time to focus more on shareholder return policies that will offset this,” adding, “The earnings slump is also not expected to persist for long.”
She noted, “As budget execution by captive advertisers normalizes in 2027, cost-efficiency improvements in labor expenses at underperforming overseas subsidiaries in Europe and China will also begin to take full effect.” She continued, “We are revising our full-year earnings estimates downward by 16% to reflect the prolonged control over marketing budget execution by affiliated advertisers.” However, he elaborated, “We have factored in that the reduction in the number of outstanding shares resulting from the 12% treasury stock cancellation scheduled for the 15th is expected to largely offset the decline in EPS (earnings per share) caused by the drop in earnings.”
Previously, the company announced in a disclosure last month its plan to repurchase and cancel additional treasury shares, in addition to canceling its entire existing treasury share portfolio (12%). The analyst emphasized, “The additional buybacks and cancellations will be carried out in phases, totaling 40 billion won by the end of 2026 and 100 billion won by the end of September 2027,” adding, “We are focusing on the effect of enhancing per-share value resulting from a significant reduction in the number of outstanding shares.”
Despite a decline in earnings this year, the analyst expects the annual DPS (dividend per share) to remain at the previous year’s level (1,230 won). He predicted, “This proactive shareholder return policy will serve as a strong factor supporting the stock price against downside pressure.”
Regarding third-quarter earnings, he projected that consolidated gross profit would be 460.4 billion won (+1% year-over-year) and operating profit 81.9 billion won (-15%), both of which are expected to fall significantly short of consensus estimates.
The analyst explained, “Captive advertisers’ trend of controlling budget spending is lasting longer than initially expected. Despite the launch of the foldable flagship model, rising memory prices have led to reduced marketing expenses.” He added, “The trend of recruiting non-affiliated partners focused on the company’s new businesses (digital and BTL) and expanding new orders centered on North America and Shinhung continues.” For subsidiaries in underperforming regions such as Europe and China, efforts to improve operational efficiency through restructuring are being carried out in parallel.”