Why Assembly's Southeast Asia Play Could Make Stagwell a Growth Engine in APAC

The Asia-Pacific (APAC) region is undergoing a digital advertising revolution, with Southeast Asia (SEA) at its epicenter. Amid this transformation, Assembly—a global omnichannel media agency under Stagwell (NASDAQ: STGW)—has placed a bold bet on the region by appointing Sharon Soh as its Managing Director for Southeast Asia. Soh's deep local expertise and track record at IPG Mediabrands make her a pivotal hire, signaling Assembly's intent to capitalize on SEA's rapid digital adoption while challenging entrenched competitors like IPG Mediabrands. For investors, this strategic move positions Stagwell as a leveraged play on one of the world's fastest-growing ad markets.

The Southeast Asia Opportunity: Digital Growth Unleashed

SEA's ad spend is projected to surge 6.8% in 2025, outpacing even India's 20% growth, driven by e-commerce expansion and mobile-first consumer behavior. Digital ads now account for 70% of APAC's total spend, with programmatic buying growing at 24% annually. This shift has turned SEA into a battleground for agencies capable of blending global insights with hyper-local execution.

Assembly's play here is particularly compelling. Soh, who spent two decades at IPG Mediabrands, brings intimate knowledge of Southeast Asian markets, including expertise in sectors like FMCG and automotive. Her mandate—translating Assembly's global strategy into actionable local initiatives—aligns with the region's demand for data-driven, omnichannel solutions. For instance, her focus on bespoke client outcomes could help Assembly capture market share from rivals struggling to adapt to SEA's fragmented digital landscape.

Why Stagwell (STGW) Is Undervalued

Despite its strategic moves, Stagwell trades at a discount to peers. As of June 2025, its EV/EBITDA multiple is ~9x, below the industry average of 12-15x. This undervaluation reflects near-term headwinds, including a 3% YoY revenue dip in Q1 2025 and margin pressures. However, the company's long-term thesis is strong:

1. Growth Catalysts:
2. Assembly's SEA expansion is part of a broader APAC push, complemented by offices in Pune (India) and strategic hires in China and North Asia.

3. Stagwell's proprietary STAGE operating system integrates data and AI to deliver omnichannel campaigns, a critical tool in a programmatic-driven market.

4. Financial Leverage:

5. Stagwell's net new business pipeline grew 9% YoY in Q1, with $446M in trailing-twelve-month wins. This bodes well for future revenue.

6. The company reaffirmed its 2025 targets: ~8% net revenue growth and $410M–$460M in Adjusted EBITDA.

7. Competitive Edge:

8. While IPG Mediabrands dominates in scale, Assembly's agility and localized focus could carve out a niche. Soh's departure from IPG highlights talent migration toward disruptors, a trend that could accelerate if clients prioritize hyper-local execution over global brand recognition.

Risks and Considerations

The strategy isn't without risks. SEA's ad market faces challenges like underdeveloped TV digital platforms and currency volatility. Additionally, Stagwell's debt load ($1.465B as of Q1) remains a concern, though its refinancing of credit facilities aims to improve flexibility. Investors should also monitor macroeconomic factors: APAC's growth could slow if China's retail media dominance (e.g., Douyin/TikTok's 11% ad revenue surge) crowds out regional players.

Investment Thesis: Buy on Dip

Stagwell's stock price, currently trading at $4.56, is a fraction of its $8.34 average analyst price target. With SEA's ad spend poised to grow and Assembly's localized strategy gaining traction, this undervaluation could reverse as the market recognizes Stagwell's exposure to high-growth markets.

The data underscores why investors should pay attention: APAC's digital ad spend is growing nearly twice as fast as the global average. Assembly's play in SEA isn't just a regional bet—it's a lever to capture a structural shift toward omnichannel, data-driven advertising.

Conclusion

Sharon Soh's appointment marks a strategic inflection point for Stagwell. By leveraging her local expertise in a market where digital ad spend is booming, Assembly is well-positioned to outpace rivals and capitalize on APAC's growth. While risks remain, the undervalued stock offers asymmetric upside for investors willing to bet on the region's digital future. For those seeking exposure to high-growth markets, Stagwell is a compelling buy—especially if its Q2 results reaffirm its 8% revenue growth guidance.

Disclosure: The analysis is based on public data and does not constitute personalized investment advice. Risks include macroeconomic downturns and competitive pressures.