DB Financial Investment noted on the 26th that ECHOMARKETING's performance in the first quarter of this year is expected to be weak compared to the previous year, lowering its investment opinion and target stock price. The investment opinion is 'neutral (Hold)', and the target stock price has been revised down to 9,400 won. ECHOMARKETING's previous day's closing price was 8,210 won.
DB Financial Investment projected that ECHOMARKETING will record consolidated revenue of 58.8 billion won and an operating profit of 3.7 billion won in the first quarter of this year. This represents a decrease of 5.6% and 27.6%, respectively, compared to the same period last year. Shin Eun-jung, a Research Institute at DB Financial Investment, explained, "Despite consistently bringing in new advertisers, we expect the performance to remain at last year's level due to the advertising market recession and increased staffing."
ECHOMARKETING will start producing content this year based on cloud servers and artificial intelligence (AI) tools. In this regard, Shin added, "We hope to optimize advertising operating expenses."
Shin speculated that the sales of ECHOMARKETING's subsidiary Daily & Co. have been sluggish. He stated, "While it is positive that Daily & Co.'s nail brand Finger is expanding its market share in Japan, it is estimated that the sales of the new products 'Chium' and 'Scalp Massager' from Clock are sluggish due to their high price point and weakened consumer sentiment," and analyzed, "We expect an operating loss of 600 million won in the first quarter of this year, following the fourth quarter of last year."
He also added that Daily & Co. needs to launch items that can achieve consistent sales and enable global expansion.
Concerning another subsidiary, Andar, it is projected to record revenue of 36.5 billion won and an operating profit of 2.6 billion won in the first quarter of this year. These figures represent increases of 5% and 17.5%, respectively, compared to the same period last year. Shin, a Research Institute, noted, "We expect continued healthy growth even in the off-season," and stated, "Andar is set to open an offline store in Sydney, Australia, in the first half of this year following its expansion into Singapore and Japan, and it is expected to enter the U.S. market through both online and offline channels in the second and third quarters of this year." He also mentioned that while an increase in expenses, such as marketing during the initial entry, is anticipated, it is expected to contribute to global revenue starting next year.
He then stated about ECHOMARKETING, "So far, no clear elements have been identified to drive significant topline growth, so we are lowering the investment opinion to neutral," and added, "It is time to watch the performance growth through Daily & Co.'s new business and Andar's expansion into Australia and the U.S."