As the Number of 'Jipkokjok' Increases, Interior Stocks Soar

Hanssem, Dongwha, LG Hausys Up 43%, 70%, 46% in One Month
Increased Home Decorating Demand Due to COVID-19
Continued Redevelopment Regulations Also a Beneficial Factor

[Asia Economy Reporter Koo Eun-mo] As the number of 'homebodies' spending more time at home due to the impact of the novel coronavirus infection (COVID-19) increases, the performance and stock prices of interior-related sectors are simultaneously on the rise.

According to the Korea Exchange on the 15th, Hanssem's stock price closed at 89,000 KRW, up 3.49% (3,000 KRW) from the previous trading day. Hanssem has closed higher for seven consecutive trading days until the previous day, soaring 43.3% in the past month. During this period, other interior-related stocks such as Dongwha Enterprise (70.5%), Hyundai Livart (62.9%), and LG Hausys (45.6%) also rose significantly, outperforming the KOSPI return (3.7%).

This upward trend is interpreted as reflecting growth expectations for the interior industry. As the time spent at home increases due to COVID-19, interior demand is naturally expected to rise. In Hanssem's first-quarter performance, sales in interior furniture and online sectors grew by 19% and 32%, respectively.

The recent rapid growth of services combining interior and e-commerce, such as 'Today’s House' or the U.S. 'Houzz,' is a positive point for interior companies. Chaesangwook, a researcher at Hana Financial Investment, said, "In the past, domestic interior companies' growth strategies were O2O (online-to-offline), but they are gradually evolving into services combining social platforms and commerce. The growth of various platforms and commerce will act as a tailwind for the interior business and online sectors."

The expectation that government regulations on reconstruction and redevelopment will continue is also evaluated as a beneficial factor for interior stocks. Baek Jae-seung, a researcher at Samsung Securities, said, "The recent direction of the government's real estate policy can be seen as aiming for housing supply-demand balance and price stabilization through supply support in Seoul and metropolitan areas. While such policies may slow the growth of construction companies' performance, they will serve as an opportunity to reveal the relative robustness of interior demand," he forecasted.

Despite the impact of COVID-19, interior stocks that posted good results in the first quarter are expected to maintain a positive atmosphere in the second quarter. According to financial information provider FnGuide, Hanssem's operating profit for the second quarter of this year is estimated to increase by 101.5% year-on-year to 16.9 billion KRW. Sales are also expected to grow by 7.7% to 442.3 billion KRW. During the same period, Hyundai Livart is also expected to grow sales by 5.3% to 318.2 billion KRW and operating profit by 43.3% to 8.6 billion KRW.

This content was produced with the assistance of AI translation services.