[Click eStock] "Hanssem, External Environment Difficult but Rehouse Growth Strategy Valid"

[Asia Economy Reporter Eunmo Koo] DB Financial Investment evaluated Hanssem as having unfavorable external conditions but maintaining a valid Rehouse growth strategy.

On the 10th, DB Financial Investment researcher Yoonho Cho stated in a report that the external environment surrounding Hanssem is unfavorable. Researcher Cho analyzed, "Due to the impact of COVID-19, the number of visitors to direct stores and agencies has decreased, and housing transaction volume has also declined due to strengthened real estate regulations. On the other hand, as offline marketing shrinks, there is a reactive increase in online (especially interior) demand, but it is limited in overcoming the demand contraction caused by the decrease in store customers and housing transaction volume." Regarding the B2B business related to apartment move-ins, although the negative growth trend is slowing, it is difficult to lead a performance rebound because the volume of move-ins is unlikely to increase within the next two years.

The Rehouse growth strategy is evaluated as valid. Researcher Cho analyzed, "Despite the difficult external environment, the reason Hanssem's first half performance was favorable was due to the rebound in housing transaction volume and the Rehouse growth strategy. Although the rebound phase of transaction volume is ending due to real estate policies after the third quarter, the Rehouse growth strategy remains valid."

In particular, the Rehouse (remodeling) growth strategy is considered a core value of Hanssem and holds significant meaning for the valuation of Hanssem's stock. Researcher Cho explained, "Although housing transaction volume is the most important variable for Hanssem's B2C performance, the reason we believe Rehouse growth will be maintained is that Rehouse is still in the early growth stage. The share of Hanssem's Rehouse business in the overall remodeling market is only 2-3%, and the price per case is about 26 million KRW, so both P (price per case) and Q (market share) have high potential to rise, making it a stage less affected by macro indicators such as transaction volume."

Hanssem's third-quarter sales are estimated at 474.3 billion KRW, a 15.6% increase compared to the same period last year, and operating profit is estimated at 21.3 billion KRW, a 199.1% increase. Researcher Cho stated, "Although performance will improve significantly, it is expected to be sluggish compared to the previous quarter," explaining, "This is because the performance of other business units, excluding Rehouse and online interior, is expected to decline quarter-on-quarter due to the decrease in housing transaction volume."

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