[Click eStock] "Hanssem, Attention Needed on Potential Expansion of Accessible Markets"

[Asia Economy Reporter Eunmo Koo] KB Securities analyzed that for Hanssem, attention should be paid to the potential expansion of accessible markets rather than the contraction trend in housing sales volume.

Jang Moonjun, a researcher at KB Securities, stated in a report on the 13th, “Due to the government's strengthened regulations on reconstruction, it is estimated that the remodeling market accessible to Hanssem has expanded by 20-30% compared to before,” adding, “This is the reason why we recommend buying despite the contraction trend in housing sales volume observed since the second half of the year.” He further predicted, “If this year’s recovery in the interior sector’s performance is combined with the growth of Rehouse, which has established a large-scale construction system in the mid-to-long term, a meaningful stock price revaluation will be possible.”

The strong performance in the third quarter was evaluated as a result of the combined effects of Rehouse and interior sector growth and the turnaround to profitability of affiliates, despite the off-season and a sharp decline in B2B sales. Hanssem announced preliminary consolidated results for the third quarter with sales of 514.9 billion KRW, a 25.4% increase compared to the same period last year, and operating profit of 24 billion KRW, up 236.4%.

Researcher Jang explained, “There was a burden as B2B sales in this quarter showed a double-digit decrease compared to both the same period last year and the previous quarter, during the traditional off-season of the third quarter. However, sales growth in Rehouse due to an increase in direct construction packages, continued positive effects on the interior sector from the spread of COVID-19, and the turnaround to operating profit of affiliates through reduced losses at the China subsidiary combined to slightly exceed market expectations in both sales and operating profit.”

He assessed that expectations for the third quarter’s performance have already been reflected in the sharp stock price rise since mid-September. Researcher Jang said, “Although the contraction trend in housing sales volume may be a burden for short-term stock price increases, we maintain a continuous buying perspective because, based on the improvement trend in fundamentals across all sectors except B2B, it is expected that good performance surpassing the contraction trend in housing sales volume can be achieved in the future.”

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