PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩550 per share · Prices as of the 2026-10-02 close
HS Ad improved its operating margin in 2025 despite a revenue decline, and continues to show pronounced quarterly seasonality in 2026 while expanding its shareholder return policy.
2025 consolidated revenue fell year over year to KRW 483.9 billion, yet the operating margin improved to 5.7%.
After swinging to an operating loss of KRW 12.1 billion in Q1 2026, the company returned to a KRW 3.8 billion operating profit in Q2, continuing its seasonal pattern.
The company announced plans to raise its dividend payout ratio from roughly the 30% range to at least 50%, up to 60%, over three years, and to fully retire its treasury shares.
The firm is expanding non-affiliate clients such as Dunamu and Jeisys Medical to reduce reliance on LG Group-affiliated business.
HS Ad added generative-AI-based content production and copyright agency services to its business scope to respond to the digital and AI transition.
HS Ad is an LG Group-affiliated advertising agency founded in 1984 that originated from LG Ad and adopted its current name in 2023 after absorbing HS Ad and Elbest.
Its core business is production of advertising materials and media buying across the four traditional media, providing services through overseas subsidiaries and branch offices worldwide.
The company has made digital transformation a core priority, using its proprietary DASH X and DASH.AI platforms to respond to digital innovation.
While LG Group-affiliated advertising volume forms a stable revenue base, the company has recently secured new non-affiliate clients such as Dunamu and Jeisys Medical, expanding into finance, beauty, gaming, pharmaceuticals, sports, and public-sector accounts.
Industry observers note that large conglomerate-affiliated agencies are increasingly pursuing non-affiliate clients to secure a more stable revenue base amid rising volatility in affiliate business.
In brand reputation surveys of listed advertising companies, HS Ad frequently ranks in the upper tier, following Cheil Worldwide, Innocean, SM C&C, Incross, and KT M&S.
Korea's advertising market is being reshaped around digital advertising, which now accounts for more than 60% of the total, and HS Ad is responding by strengthening its role as a marketing orchestration partner leveraging AI technologies.
In 2026, the company also expanded its scope of business to include generative-AI-based content production and copyright agency services.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩99B | ₩500M | 0.5% |
| 2025Q3 | ₩92.2B | ₩5.2B | 5.6% |
| 2025Q4 | ₩211.9B | ₩31.3B | 14.8% |
| 2026Q1 | ₩72.1B | -₩12.1B | −16.8% |
| 2026Q2 | ₩102.8B | ₩3.8B | 3.7% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩530.4B | ₩24.8B | ₩17.5B | 4.7% | 9.9% | 208.5% |
| 2023 | ₩548.3B | ₩26.4B | ₩16.2B | 4.8% | 8.9% | 199.7% |
| 2024 | ₩554.7B | ₩29.6B | ₩22.7B | 5.3% | 11.2% | 172.6% |
| 2025 | ₩483.9B | ₩27.5B | ₩17.4B | 5.7% | 8.2% | 139.6% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23
Consolidated revenue in 2025 fell to KRW 483.9 billion from KRW 554.7 billion in 2024, representing a year-over-year decline of about 12.8%.
Operating profit came in at KRW 27.5 billion with an operating margin of 5.7%, an improvement from 5.3% in 2024 and a continuation of the margin recovery seen from 4.7-4.8% in 2022-2023.
Net income attributable to owners was KRW 17.4 billion, down from KRW 22.7 billion in 2024, reflecting the revenue contraction alongside base-effect dynamics on the bottom line.
Quarterly results show pronounced seasonality: fourth-quarter 2025 revenue reached KRW 211.9 billion with operating profit of KRW 31.3 billion and net income of KRW 22.3 billion, concentrating much of the annual result in that single quarter.
By contrast, first-quarter 2026 revenue fell year over year by about 10.7% while the operating loss and net loss widened, with revenue of KRW 72.1 billion, an operating loss of KRW 12.1 billion, and a net loss of KRW 10.0 billion.
This was attributed to declining demand for ad production, reduced media-buying commissions, a contraction in broadcast advertising, and cuts to advertiser marketing budgets.
Second-quarter 2026 swung back to profit with revenue of KRW 102.8 billion, operating profit of KRW 3.8 billion, and net income of KRW 2.8 billion.
Trailing four-quarter (Q3 2025-Q2 2026) net income attributable to owners totaled roughly KRW 18.5 billion, underscoring the structural tendency for annual results to concentrate in specific quarters, while 2025 operating cash flow turned negative at roughly -KRW 10.9 billion, a departure from the positive flows seen in 2023-2024 and a divergence from reported net income.
Korea's advertising market was valued at roughly KRW 17 trillion in 2025 and continues to grow modestly, with digital advertising now firmly accounting for more than 60% of the total.
Within this landscape, large conglomerate-affiliated agencies such as Cheil Worldwide (Samsung Group), Innocean (Hyundai Motor Group), Daehong Communications (Lotte Group), and HS Ad (LG Group) dominate the domestic market.
Rival agencies Cheil Worldwide and Innocean have shown diverging results and share-price trends, driven respectively by reduced marketing spending at Samsung and expanded advertising at Hyundai Motor.
Both firms continue to pursue strategies to grow their non-affiliate client base, with Innocean's domestic non-affiliate client share rising from 42% last year to 45% in the first quarter of this year.
HS Ad is pursuing a similar direction in expanding non-affiliate revenue, though its business structure remains, like its peers, heavily influenced by affiliated-group marketing budgets.
In brand reputation surveys, HS Ad continues to rank in the upper tier following Cheil Worldwide, Innocean, and SM C&C, alongside Incross and KT M&S. The proliferation of AI technology combined with new platforms is also accelerating a broader paradigm shift across the advertising industry.
In February 2026, the company's board resolved to amend its articles of incorporation to add software development, information services, and copyright agency services to its scope of business, a move aimed at responding to the rapid spread of generative AI in content planning, production, and data analysis.
This forms part of a strategy to create new revenue models through generative-AI-based creative production, customized campaign operations, and solution development.
Earlier, the company announced a shareholder-return expansion plan under which its base dividend payout ratio would rise from roughly 30% to at least 50%, and up to 60%, over the following three years.
The company also introduced an interim dividend for the first time starting in 2025 and moved to fully retire its treasury shares within the year. It further outlined plans to diversify growth drivers and build a sustainable growth foundation by developing AI-based new revenue models.
On the profitability side, the company indicated a direction of using AI-based marketing solutions to boost productivity and streamline its cost structure.
Expanding non-affiliate advertisers remains an ongoing task, with new client wins continuing across finance, beauty, gaming, pharmaceuticals, sports, and the public sector. However, earnings volatility during seasonally weak periods, as seen in the first quarter of 2026, remains a variable to monitor.
The current share price trades at a discount to net asset value per share, and this also corresponds to a relatively low multiple compared with the company's earnings scale over recent years.
However, because net income attributable to owners declined in 2025 and the company recorded a seasonal loss in the first quarter of 2026, quarter-to-quarter earnings variability can affect how the valuation is interpreted.
Peers Cheil Worldwide and Innocean are noted for dividend yields in the 6-7% range, which continue to be viewed as attractive for dividend-oriented investors, offering a reference point for comparing dividend appeal within the sector.
Whether the company's announced increase in payout ratio and additional dividend plan can be sustained alongside earnings improvement remains a key point to watch.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-08-23
The company decided to raise its base dividend payout ratio from roughly the 30% range to at least 50%, and up to 60%, over the following three years. This is paired with a recurring additional dividend and the full retirement of its treasury shares, intensifying its shareholder return program. Since 2025, it has also introduced an interim dividend for the first time, diversifying the timing of returns.
The company has secured new clients such as Dunamu and Jeisys Medical, expanding into finance, beauty, gaming, pharmaceuticals, sports, and public-sector accounts. This is viewed as a factor that lowers dependence on affiliated advertising volume and strengthens revenue stability. As rivals pursue the same strategy, HS Ad is likewise diversifying its client base.
The company has expanded its digital business through the DASH X and DASH.AI platforms, and in 2026 it added generative-AI-based content production and copyright agency services to its scope of business. It has also outlined plans to streamline its cost structure through AI-based marketing solutions.
2025 revenue fell 12.8% year over year, and the first quarter of 2026 saw a further 10.7% year-over-year decline, continuing the contraction trend. This is attributed to declining demand for ad production, reduced media-buying commissions, and a contraction in the broadcast advertising market.
Fourth-quarter 2025 revenue and operating profit accounted for the bulk of the annual result, while the first quarter of 2026 posted an operating loss of KRW 12.1 billion and a net loss of KRW 10.0 billion. Such quarter-to-quarter swings reduce the predictability of earnings.
Because LG Group-affiliated advertising volume forms the core of its revenue base, changes in group marketing budget policy or advertising cuts amid an economic slowdown could directly affect performance.
Rivals Cheil Worldwide and Innocean have likewise shown diverging results depending on Samsung and Hyundai Motor Group budget direction, illustrating a risk common to affiliate-dependent advertising agencies generally.
Korea's advertising market, valued at roughly KRW 17 trillion in 2025, continues to grow modestly, but in an economic downturn corporate marketing budgets are often among the first to be cut, which could adversely affect advertising agency revenues.
In brand reputation surveys of listed advertising companies, HS Ad ranks in the middle tier, following Cheil Worldwide, Innocean, and SM C&C, so intensifying competition for non-affiliate clients could make it more difficult to win new accounts.
The company's announced increase in payout ratio and additional dividend plan presuppose stable future earnings; if seasonal losses like those seen in the first quarter of 2026 recur or widen, concerns about the sustainability of the return plan could grow.
Around this time the company is expected to report preliminary third-quarter 2026 results, offering a check on whether revenue and profit continue to recover after the seasonally weak first quarter.
This period will show whether the historical seasonal pattern of revenue and profit concentration in the fourth quarter repeats, and how much marketing budget advertisers deploy.
Full-year 2026 results and year-end dividend disclosures should reveal whether the second year of the additional-dividend commitment is being implemented as announced.
Investors should track whether new generative-AI-based businesses, such as content production and copyright agency services, begin contributing to revenue and how these initiatives progress.
HS Ad improved its operating margin in 2025 despite lower revenue, showing stability on the profitability side, and in 2026 it continues to exhibit a clear seasonal pattern of first-quarter losses followed by second-quarter returns to profit.
The company has shifted policy toward expanded shareholder returns, including a higher payout ratio, additional dividends, and treasury-share retirement, while also seeking to diversify its revenue base by adding non-affiliate advertisers alongside its LG Group-affiliated business.
At the same time, it has moved to address digital transformation by adding new business areas such as generative-AI-based content production and copyright agency services to its scope of operations.
However, factors such as the contraction of traditional media advertising, tightening advertiser marketing budgets, and a revenue structure dependent on affiliated business remain sources of earnings volatility.
Upcoming third-quarter results, fourth-quarter peak-season revenue trends, and the execution of the annual year-end dividend will likely serve as key indicators of the durability of the company's shareholder return plan and earnings recovery.
Report written 2026-09-05 · Data as of 2026-09-04
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