[Click eStock] "CNC International, Korea's Intercos... Buy on Correction"

Meritz Securities on the 13th recommended buying CNC International, describing it as Korea's Intercos with unique competitiveness, especially during market corrections.

Hanuri, a researcher at Meritz Securities, stated in a report on the same day, "CNC International is expected to record Q3 sales of 54.2 billion KRW and operating profit of 6.7 billion KRW, representing a 50.1% increase and a 6% decrease year-on-year, respectively, falling short of expectations."

This is attributed to a decrease in high-margin products due to delayed shipments to the U.S. and a one-time cost increase (1.5 billion KRW in incentives and 400 million KRW in retirement benefit provisions) caused by a rise in cost ratio from operational disruptions at the Shanghai 2nd plant.

By country, domestic sales are projected to increase by 53.5% to 26.5 billion KRW. This is expected to have a trickle-down effect due to the strong performance of major clients such as 3CE, Rom&nd, and Clio. Sales are also anticipated to grow in the U.S., Europe, and other parts of Asia.

On the other hand, China is estimated to turn to a loss with sales of 2.6 billion KRW and an operating loss of 500 million KRW. He explained, "Due to a decrease in orders during the off-season and initial operational disruptions at the Shanghai 2nd plant, productivity has deteriorated," but added, "Considering the Singles' Day special demand and process stabilization in Q4 this year, growth potential is expected to strengthen."

Furthermore, he added, "The acquisition of mega brands under Est?e Lauder and LVMH is also imminent," and "With additional CAPA expansion, structural external growth is being realized."

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