[Click eStock] "Coway, Stable Performance Expected in Q2 as Well"

Korea Investment & Securities Issues 'Buy' Rating and 95,000 KRW Target Price... Closing Price on 11th at 75,100 KRW

Coway Water Purifier (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] Coway is expected to show stable performance in the second quarter as well.

According to Korea Investment & Securities on the 12th, Coway's sales in the second quarter are expected to reach 786 billion KRW, a 4% increase from the previous year, and operating profit is expected to be 137 billion KRW, similar to last year, meeting consensus estimates. Sales of air purifiers, which showed strong performance last year, were somewhat sluggish, and new sales have contracted since March due to the impact of COVID-19. On the other hand, thanks to strong sales of mattresses and new product lines, a gradual net increase is expected, and the domestic rental business is anticipated to show better-than-expected results.

Sales and services in Malaysia were completely suspended until mid-last month due to COVID-19, but operations have resumed as lockdowns have eased. Na Eunchae, a researcher at Korea Investment & Securities, explained, "Initially, a decline in the Malaysian business was expected in the second quarter, but with the rapid increase in new accounts, growth compared to the previous year is possible. As of the end of the first quarter, the number of Malaysian accounts reached 1.43 million, and sales are expanding mainly in air purifiers and mattresses from water purifiers."

Korea Investment & Securities has given Coway a 'Buy' rating. The target price was raised from 87,000 KRW to 95,000 KRW. The closing price on the 11th was 75,100 KRW. Researcher Na said, "There was significant disappointment regarding dividend policy after the acquisition by Netmarble, and concerns about weakened sales capabilities due to COVID-19 were high. However, considering increased demand for environmental home appliances, the stability of the rental business, and faster-than-expected normalization of overseas operations, operating profit estimates for this year and next year have been raised by 10% and 8%, respectively. Although Coway is maintaining its position without aggressive sales channel expansion, it is seeking to increase product sales through the existing Cody channel and diversify channels such as online. There are opportunities for Coway as the number one environmental home appliance company in the mid to long term," he analyzed.

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