[Click eStock] "Hanssem, Decreased Housing Transactions and Rising Costs"… Target Price Down

NH Investment & Securities maintained a neutral investment rating on Hanssem on the 31st, stating that while housing transaction volumes have sharply declined and the company's scale has contracted, costs are increasing in the process of implementing strategies for the remodeling business division.

Based on the difficulty of housing transaction volumes recovering within the year and the delayed timing for profit recovery, the operating profit forecast for next year was lowered by 7%, and the target stock price was reduced from the previous 55,000 KRW to 50,000 KRW.

Hanssem's sales for this year are projected to decrease by 7% year-on-year to 1.8 trillion KRW, with an operating loss of 63.8 billion KRW. Although raw material prices have stabilized, expenditures related to building an integrated remodeling solution, such as labor costs and outsourced service fees, continue. If business-to-consumer (B2C) sales do not recover meaningfully, improving profit margins will be difficult.

Minjae Lee, a researcher at NH Investment & Securities, explained, "Sales in 2024 are estimated at 2.1 trillion KRW, with operating profit at 69.2 billion KRW," adding, "As housing transaction volumes recover, performance is expected to improve based on the stabilization of unlimited liability construction services and integrated remodeling solutions."

He also stated, "Efforts to enhance construction quality and increase transparency in the remodeling business will serve as sufficient incentives for customer attraction," noting, "For reference, housing transaction volumes for 2023 and 2024 were assumed to be 500,000 units and 760,000 units, respectively."

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