[Click eStock] "Hanssem, Concerns Over Short-Term Earnings Weakness Are Excessive... Now Is the Buying Timing"

Photo by Hanssem

[Asia Economy Reporter Park Jihwan] Yuanta Securities stated on the 5th that concerns over short-term earnings weakness for Hanssem are excessive and that now appears to be the time to buy. The investment opinion 'Buy' and target price of 160,000 KRW were maintained.

Kim Giryong, a researcher at Yuanta Securities, said, "Hanssem's consolidated earnings for Q2 are expected to show sales of 574.2 billion KRW, up 10.6% year-on-year, and operating profit of 24.8 billion KRW, up 9.4%. Sales growth is driven by Rehouse and online channels, each increasing by more than 25% compared to the same period last year, continuing a high growth trend, while offline channels (dealerships, direct stores) are expected to reflect seasonal off-season and cost burden effects. The rise in prices of furniture wood raw materials such as boards (PB, MDF, etc.) is due to increased domestic demand and reduced imports.

It is expected that the impact of raw material-related earnings issues on performance deterioration will gradually ease. Although the Shanghai Container Index remains at a high level, the gradual recovery of domestic PB import volumes, normalization of the company's safety stock (from 2 weeks to 2 months), and strengthened profit and loss management stance continue.

Researcher Kim said, "Hanssem's influence expansion through the increase of standard stores and reinforcement of construction personnel in the second half will become more concrete," adding, "the net increase effect of 9 standard stores (10 planned within the year) and the resulting increase in Rehouse dealerships (from 510 in 2020 to 700 in 2021), as well as traffic increase effects through mart entry, are expected." The expansion of direct construction packages due to personnel reinforcement (from 1,823 cases in Q1 to over 2,100 cases in Q2) and the resulting rise in sales price per package are also expected to be effective.

Researcher Kim emphasized, "Considering Hanssem's expanding influence in the interior and remodeling market, the stock price adjustment due to concerns over short-term earnings weakness should be used as a buying opportunity."

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