[Click eStock] "Coway, Q2 Earnings Surprise... Target Price Raised"

Ebest Investment & Securities Issues 'Buy' Rating and Sets Target Price at 90,000 Won... Closing Price on 5th at 74,200 Won

Coway AIS Sparkling Water Purifier (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Bo-ryeong] As Coway posted an earnings surprise in the second quarter, Ebest Investment & Securities raised its target price.

According to Coway on the 6th, the consolidated operating profit for the second quarter was preliminarily estimated at 1.6922 trillion KRW, up 22.4% year-on-year, and sales increased by 6.6% to 805.5 billion KRW.

The positive factor was analyzed to be the change in accounting standards related to domestic environmental home appliance financial lease contracts. Orin Ah, a researcher at Ebest Investment & Securities, explained, "Even excluding this effect, the operating profit was a strong 158.2 billion KRW," adding, "Domestic rental and financial lease sales recorded 492.4 billion KRW, up 7.2% year-on-year, with financial lease sales growth centered on mattresses standing out." The total number of managed accounts was 6.329 million, up 3.9% from the previous year, maintaining a stable growth trend. Among them, the net increase in domestic rental accounts in the second quarter was confirmed at 33,000.

The lockdown impact on the Malaysian subsidiary in the second quarter, which was a concern, turned out to be less than expected. New accounts were acquired online during the movement restriction period, and business resumed as restrictions eased in May. Researcher Oh said, "The Malaysian subsidiary's sales in the second quarter increased 22.2% year-on-year to 155.9 billion KRW, with an operating profit margin of 14.8%," adding, "The U.S. subsidiary also drove sales with a 40% year-on-year increase in retail sales."

Ebest Investment & Securities gave Coway a 'Buy' investment rating and set a target price of 90,000 KRW, up from the previous 80,000 KRW. The closing price on the 5th was 74,200 KRW.

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