[Click eStock] "Abko, Profit Soars This Year... Absolutely Undervalued Compared to Logitech"

[Asia Economy Reporter Hyungsoo Park] Shinhan Financial Investment estimated on the 14th that Abko's operating profit in the fourth quarter of last year likely met market expectations.

Yoon Changmin, Senior Researcher at Shinhan Financial Investment, explained, "It is estimated that in the fourth quarter, sales reached 41.1 billion KRW and operating profit was 6.4 billion KRW," adding, "This represents an increase of 83.4% and 363.0%, respectively, compared to the same period last year."

He continued, "Domestic gaming gear sales are expected to have increased by 33.8% year-on-year to 26.2 billion KRW," and added, "Overseas gaming gear sales likely rose by 100.5% to 2.8 billion KRW." Furthermore, he emphasized, "New Life home appliances sales appear to have increased by 1060.2% to 9.6 billion KRW," noting, "The New Life home appliance business was launched in the second half of 2019."

Researcher Yoon analyzed, "Small home appliances are similar to the gaming gear market," and added, "The main target age group is young people in their teens to 30s, and the market trend changes rapidly."

He said, "The main distribution channels are also centered on SNS and online," and "Abko is rapidly growing in the small home appliance market based on its success in the gaming gear market."

It is expected that Abko's New Life home appliance division will achieve sales of 60.6 billion KRW this year, a 70.2% increase compared to last year.

Researcher Yoon also explained, "Based on the success of gaming gear domestically, overseas expansion began in 2016," and "Overseas sales increased significantly after starting sales on Amazon US in November 2019."

He added, "For regional expansion, Abko has entered not only the US but also Amazon UK and India," and "The number of products is planned to expand from 6 at initial entry to over 150." Overseas gaming gear sales in 2021 are estimated at 36.2 billion KRW, a 275.0% increase compared to the previous year.

Researcher Yoon estimated, "This year, sales will reach 243.1 billion KRW and operating profit 42.9 billion KRW," and analyzed, "Based on this year's performance, the price-to-earnings ratio (PER) is 8.4 times," which is undervalued compared to the global peer average of 30.4 times for companies like Logitech and Corsair. He emphasized, "Considering the rapid growth of the front industries such as E-sports, gaming gear, and small home appliances, the current stock price is too cheap."

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