[Into the Stock] From Delisting to Revival: Jinus... Expected to Hit 1 Trillion Won in Sales This Year and Aim for Over 2 Trillion in 2024

Annual Sales Soar Over 20%
US Anti-Dumping Tariffs...Sole Beneficiary Among Competitors

[Asia Economy Reporter Park Jihwan] Mattress manufacturer Zinus is sailing smoothly toward achieving its first-ever sales of 1 trillion KRW since its founding this year. With an annual growth rate of over 20%, it is also preparing to leap into a 2 trillion KRW sales company by 2024.

The tearful delisting in 2005... A reversal drama to a 1 trillion KRW sales company in 16 years

Zinus was established in 1979 and was once a so-called thriving company dominating 40% of the global tent market. However, its success was short-lived as the financial structure deteriorated due to the Asian financial crisis, leading to a joint creditor management (composition) application to the court in 2004. In 2005, it was delisted and had to hand over its main tent business to a US private equity fund (PEF).

Based on its existing strengths, recognized experience, network, and technology in the global tent market, Zinus made a bold move into the North American mattress and frame market in 2004. It was the first in the world to introduce mattress compression packaging and delivery technology (Mattress-in-a-box), packing mattresses into boxes and selling them across the US, which began to gain word-of-mouth popularity. Noting the inconvenience of delivery due to the vast US territory, the judgment that easier delivery and installation could omit intermediate steps and significantly lower product prices proved accurate. Currently, Zinus holds the largest market share in Amazon's mattress and bed frame categories, with an average of 6 out of the top 10 best-selling products in each category.

Performance has also grown remarkably. Sales, which were 621.8 billion KRW in 2018, rose to 817.1 billion KRW in 2019 and 989.5 billion KRW last year, recording a high growth rate of 20-30% annually. This year, it aims to achieve sales of 1 trillion KRW for the first time since its founding. According to FnGuide, Zinus's expected sales for this year are projected at 1.2753 trillion KRW, a 28.9% increase from the previous year. This surpasses last year's record-high sales of 989.5 billion KRW once again. Annual operating profit is expected to rise 60% to 138.9 billion KRW from 86.7 billion KRW last year. In the securities industry, Zinus is expected to open the era of 2 trillion KRW sales in 2024, following sales of 1.4705 trillion KRW in 2022 and 1.690 trillion KRW in 2023.

The US tariff bomb once seen as a negative... turned into an opportunity

The securities industry analyzes that the anti-dumping tariffs, once considered a negative factor, have instead acted as a positive for Zinus. In March last year, seven US mattress manufacturers filed anti-dumping complaints against mattresses produced in seven countries, including Indonesia. At that time, it was widely assessed that this would be a decisive negative for Zinus, which produces mattresses in Indonesia.

However, the US anti-dumping tariff rate for Indonesia, where Zinus's factory is located, was set at 2.22%, which is very low compared to the average tariff rate of 158% for the other seven countries, highlighting price competitiveness within the industry. As competing companies drastically reduced exports to the US due to the suddenly increased tariffs, Zinus directly benefited from the windfall.

Zinus's main sales composition, based on last year's sales, is divided into mattresses (51.9%) and bedroom furniture (44.5%). By region, the US market accounts for an overwhelming 89% of sales. Significant benefits from the anti-dumping tariff burden are expected from the second half of the year. Lee Ji-young, a researcher at NH Investment & Securities, said, "Indonesia, where the factory is located, has a very low US mattress anti-dumping tariff rate compared to other countries, so price competitiveness within the industry is highlighted," adding, "The price increase in the first half is also expected to show benefits from the second half." Additionally, with the expansion of non-face-to-face demand due to the spread of COVID-19 and the increase in single-person households, the demand for self-installation mattresses and other main products is expected to surge.

Stock price up 11.7% this year... Securities industry says "Still cheap"

The securities industry analyzes that as Zinus's stepped external growth accelerates from the second half, the current stock price level is still cheap. Especially in the second half, sales are expected to grow further with the operation of the Georgia factory in the US. The Georgia factory covers about 92,900 square meters and can produce 1.8 million mattresses annually. Since North American sales account for an overwhelming proportion of total sales, logistics costs are expected to drop significantly once the Georgia factory starts operating. Kim Hyun-wook, a researcher at Shinhan Financial Investment, said, "With the US factory starting operations in Q2, monthly production of 100,000 foam mattresses is expected within the second half."

Zinus is also actively diversifying sales regions through global market expansion. Based on its high recognition in the US market, it plans to expand globally, including domestically, to continue breaking its record-high sales streak. After entering Australia in 2018, it expanded to Japan, Spain, Italy, and France in 2019, and established sales corporations in Singapore and Vietnam last year.

Zinus's stock price closed at 105,000 KRW on the 10th, up 11.7% this year. Securities firms see ample room for Zinus's stock price to rise due to clear performance improvements. The average target price for Zinus in the securities industry is 129,167 KRW. Lee Ji-young of NH Investment & Securities said, "Zinus is expected to significantly increase its market share within the industry due to the favorable anti-dumping tariff decision, and price increases in product supply and category expansion into sofas are also expected to act as stock price momentum."

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