SK Securities analyzed on September 1 that MadUp is expected to benefit as artificial intelligence (AI) investments transition from infrastructure development to revenue generation. The firm set a target price of 14,500 won and rated the stock as a 'buy.'
Heo Seon-jae, a researcher at SK Securities, stated in a report that "MadUp is achieving both cost reduction and revenue growth through vertical AI trained on over 1 trillion won worth of advertising data."
He added, "Over the past two years, AI investments have focused on infrastructure, which is still accelerating. However, the expansion of capital expenditures is leading to a decline in free cash flow for hyperscalers, shifting market interest from 'investment scale' to 'recovery speed.' The value of AI infrastructure will ultimately be confirmed by companies that generate revenue from it, which is expected to broaden interest in software and service areas that profit from AI applications."
He also noted, "The advertising agency industry has a large market size but low growth potential, which presents a significant opportunity for companies that secure a competitive edge in AI. With labor costs accounting for about 80% of expenses in this labor-intensive structure, the cost-saving effects of automation are substantial. Additionally, the existence of quantitative metrics for advertising performance allows for immediate proof of AI advantages, and as market growth is limited, expanding market share directly translates to improved results."
He projected that the expected operating profits for this year and next year will be 12.5 billion won (+45.9%) and 22.1 billion won (+77.6%), respectively. He anticipates that the company will enter a phase of significant performance growth due to the influx of large global advertisers, the expansion of small and medium-sized advertisers through AI-managed services (AMS), and the breakeven point in the solutions sector.
* This article has been translated by AI.
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