Bicycle Stocks Zooming Toward Record High Earnings

Samchully, Operating Profit of 26.7 Billion KRW Expected This Year... 2.5 Times Higher Than Last Year
Alton Sports Also Forecasts Record High Performance with 8.7 Billion KRW This Year

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] Domestic bicycle manufacturers are challenging to break their all-time high performance, driven by the increased use of electric bicycles as transportation means in the sharing economy and delivery services, as well as the rise in general bicycle sales due to increased leisure activities. Along with the rapid growth in performance, their stock prices have also continued to rise sharply this year.

According to financial information firm FnGuide on the 24th, the average annual operating profit estimate for Samchuly Bicycle this year is 26.7 billion KRW, predicted to achieve the highest performance ever with a 2.45-fold increase from 10.9 billion KRW last year. It already started off strong with record-breaking results from the first quarter. In Q1, Samchuly Bicycle's sales grew by 83.3% compared to the same quarter last year to 44 billion KRW, and operating profit increased by 520.3% to 9.5 billion KRW.

An Juwon, a researcher at Yuanta Securities, said, "Following the first quarter, the second quarter is the peak season, so even better results are expected," adding, "Demand for electric bicycles is increasing due to the emphasis on eco-friendly transportation, and bicycle sales across all brands continue to rise due to the overall increase in leisure activities. The highest performance this year is anticipated."

Alton Sports recorded Q1 sales and operating profit of 11.8 billion KRW and 2.1 billion KRW, up 29.7% and 856.5% year-on-year, respectively. For the full year, sales of 58.7 billion KRW and operating profit of 8.7 billion KRW are expected, marking the highest performance ever. Park Jaeil, a researcher at Kiwoom Securities, said, "With increased supply volumes due to rising demand for shared and electric bicycles and higher sales prices from increased demand for general bicycles, additional margin improvements are expected, leading to record-breaking performance."

The bicycle industry’s performance was bleak until 2019. Samchuly Bicycle posted operating losses of 15.4 billion KRW and 8.3 billion KRW in 2018 and 2019, respectively. Alton Sports also suffered five consecutive years of operating losses from 2015 to 2019. However, last year marked a turnaround due to COVID-19. The social atmosphere favoring non-face-to-face contact increased demand for commuting bicycles, the delivery market rapidly expanded, and demand for bicycles for leisure and exercise grew, causing the domestic bicycle market to boom. Consequently, Samchuly Bicycle and Alton Sports achieved operating profits of 10.9 billion KRW and 5.3 billion KRW last year, respectively, successfully returning to profitability.

Supported by significant performance growth, stock prices have also shown a clear upward trend. As of the closing price on the 21st, Samchuly Bicycle’s stock price rose 71.9% compared to the beginning of the year. Since April, it has increased by 17.0%. Alton Sports also rose 51.4% year-to-date and 15.5% since April.

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