[Click eStock] "Hanjin, Profitability Improvement in Parcel Division to Fully Launch in Second Half"

Hi Investment & Securities analyzed on the 4th that Hanjin is expected to see a performance turnaround starting in the second half of the year as the effect of parcel price increases takes hold. The investment opinion 'Buy' and the target price of 27,000 KRW were maintained.

Hanjin recorded consolidated sales of 691.9 billion KRW and an operating profit of 35.7 billion KRW in the second quarter. Sales decreased by 3.2% compared to the same period last year, but operating profit increased by 9.5%. Lee Sang-heon, a researcher at Hi Investment & Securities, explained, "The profitability greatly improved as the price increase effect in the parcel delivery sector became full-fledged," adding, "The second quarter sales and operating profit of the parcel delivery sector were 336.8 billion KRW and 8.3 billion KRW, respectively, representing increases of 84% and 937.5% compared to the same period last year."

Along with the increase in parcel unit prices, sales rose due to increased volume centered on home shopping clients such as GS Homeshopping and Hyundai Homeshopping, as well as e-commerce clients like Teamfresh. Above all, profitability greatly improved as the parcel price increase effect became full-fledged in an environment where operating costs were reduced through the installation of automation equipment such as wheel sorters, reduction of trunk route indices by utilizing the HUB network, and improvement of trunk load rates.

Hi Investment & Securities expects that the improvement in profitability in the parcel delivery sector will continue through the second half of the year, serving as a momentum for stock price rebound. The parcel unit price was raised from an average of 2,228 KRW in 2021 to an average of 2,416 KRW in 2022. Most importantly, this year, they are currently pursuing a target increase of 70 to 80 KRW in parcel unit prices. Additionally, the expansion of same-day delivery and short-distance delivery services is also expected to raise the average parcel unit price, according to the researcher.

He said, "Although the parcel delivery sector's performance was sluggish from the second quarter of last year due to the loss of Coupang volume," he added, "the effect of parcel price increases, which became full-fledged from the second quarter of this year, will continue through the second half, laying the groundwork for performance improvement."

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