April 19, 2024

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[THE INVESTOR] Cheil Worldwide will miss Q4 earnings expectations as its recovery in slow markets including China is delayed, said Meritz Securities on Jan. 24 downgrading its recommendation to a “trading buy” from a “buy.”

Its gross profit in the period will rise 3.6 percent on-year to 289 billion won (US$269.61 million) and operating profit will fall 3.6 percent to 52.6 billion won, estimated analyst Jeong Ji-su.

Due the management reshuffle in Samsung Group, it has managed secure only some deals and the slow recovery in domestic consumption is curbing those from non-affiliates, said the analyst. It has maintained an upturn in Europe and Southeast Asia but needs more time to recover in slow markets including China, noted Jeong.

Its earnings this year will be better boosted by a global sports event and recovery in China, according to Jeong who calculated that its gross profit will increase 6.1 percent to 1.07 trillion won and operating profit by 12.5 percent to 183.8 billion won.

Its stocks will be bolstered by its dividend policy that will be maintained at 60 percent of its net profit, and its major client Samsung Electronics’ plan for a heavier marketing campaign in emerging markets also is a positive, added the analyst maintaining 24,000 won target price.

By Hwang You-mee (glamazon@heraldcorp.com)