DB Securities announced on August 21 that it has raised its target price for KT Nasmedia from 14,000 won to 16,500 won, an increase of 17.8%, citing a turnaround in the digital advertising sector and cost efficiency in platform advertising. The firm maintained its 'buy' rating.
Shin Eun-jung, a researcher at DB Securities, stated, "The clear performance improvement is a key investment point for KT Nasmedia," adding that the target price was adjusted to reflect upward revisions in earnings estimates for 2026 and 2027.
In the second quarter, KT Nasmedia reported revenues of 32.3 billion won, a 22.8% increase compared to the same period last year, while operating profit surged by 199.2% to 7.8 billion won. The previously sluggish digital advertising revenue grew by 21.2%, driven by improved profitability in the platform commerce sector.
The growth in digital advertising was attributed to a more than 100% increase in revenue from online video services (OTT) such as Netflix and Tving. Additionally, platform advertising saw growth in revenue and profit due to increased sales based on the Cost Per Sales (CPS) model and improved conversion rates, along with the expansion of digital out-of-home advertising (DOOH).
Looking ahead, DB Securities expects the positive performance trend to continue in the second half of the year. The firm forecasts third-quarter revenues of 32.3 billion won and operating profit of 5.9 billion won, representing increases of 3.4% and 57.9%, respectively, compared to the same period last year. Although the operating profit margin is expected to decline from the second quarter due to the off-peak advertising season, it is projected to rise to 8.4 billion won in the fourth quarter, driven by the peak advertising season and increased CPS in commerce.
Shin noted, "The recent decision to retire 2 billion won worth of treasury stock marks the beginning of expanded shareholder returns," emphasizing the need to positively assess efforts to enhance shareholder value alongside performance improvements.
* This article has been translated by AI.
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