Hanse Industrial, Q2 Earnings Better Than Expected Despite Concerns

[Asia Economy Reporter Ji-hwan Park] DB Financial Investment maintained a buy rating and a target price of 34,000 KRW for Hansae Co., Ltd. on the 18th, stating that the company's Q2 performance was better than market expectations.

Hyunjin Park, a researcher at DB Financial Investment, stated, "On a consolidated basis, Q2 sales reached 406.8 billion KRW, up 3.7% year-on-year, and operating profit increased by 1151.6% to 20.3 billion KRW, indicating a better-than-expected performance compared to market concerns."

OEM sales in dollar terms are expected to have grown by around 10%, according to the analysis. Researcher Park said, "the recovery in end-consumer demand was strong, leading to a stronger-than-expected order recovery mainly from major North American buyers, and the increase in large-scale orders is understood to have positively impacted profit improvement." Unlike in Q1, rising raw material and logistics costs increased cost burdens, but the simultaneous increase in large-scale orders is expected to help defend profits better than the market had feared.

Researcher Park added, "The inventory ratio of clothing in the U.S. has been steadily improving, and orders at a level that can substantially replace sales of protective clothing and masks have come in, suggesting that Q2 is expected to perform well."

Although the burden of last year's performance base remains significant in Q3, the industry has undergone intensified restructuring due to COVID-19, leading to a concentration of orders among top vendors. Researcher Park said, "We will continue to prefer a trading strategy for the time being, and around September, when next year's OEM order plans become clearer, actively considering whether to buy will be a viable alternative."

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