Poor Earnings and Tariff Concerns: How Low Can Hansae's Stock Go?

52-Week Low Hit During Trading on the 27th
Down 34.5% Year-to-Date
Second Quarter Earnings Shock
Recovery Unlikely Amid Tariff Impact in the Second Half

Hansae Co., Ltd. continues to struggle to escape from its prolonged slump in stock price. Even after falling below the 10,000 won mark this month, the stock has remained weak. Poor performance and concerns over tariffs have had a negative impact, and with the unfavorable environment showing little sign of improvement, a recovery in the stock price is expected to be slow.

According to the Korea Exchange on August 28, Hansae Co., Ltd. hit a new 52-week low during the previous trading session, dropping to 9,250 won during the day. The stock closed at 9,300 won, down 0.64%, marking its third consecutive day of declines. Except for just five trading days this month, Hansae Co., Ltd. has ended every session lower. The stock price has once again fallen below the 10,000 won level, as it did in early April. While it quickly rebounded above 10,000 won in April, this time it has continued to weaken, slipping to 9,300 won. Since the beginning of this year, Hansae Co., Ltd. has fallen by 34.5%.

Poor earnings, combined with concerns over tariffs, have negatively affected the stock price. In the second quarter of this year, Hansae Co., Ltd. posted consolidated sales of 475 billion won, up 6% year-on-year, but operating profit plunged 71% to 12.3 billion won, significantly missing market expectations. Heo Jena, a researcher at DB Financial Investment, stated, "The second quarter's earnings shock was mainly due to increased cost ratios," adding, "With overall buyer orders shrinking, the imposition of reciprocal tariffs on Vietnam and Indonesia has raised buyer costs, which in turn has pressured Hansae Co., Ltd. to lower its prices."

The exchange rate also worked against the company. Lee Hyein, a researcher at Samsung Securities, explained, "As the won-dollar exchange rate fell in the second quarter compared to the first quarter, a higher exchange rate was applied to pre-purchased raw materials, increasing cost burdens," and added, "Since the exchange rate is expected to decline further in the second half, it will be difficult for the cost ratio burden to ease in the short term."

There are also forecasts that tariff burdens will increase in the third quarter of this year. The reciprocal tariff rates imposed by the United States on Vietnam and Indonesia, where Hansae Co., Ltd.'s production facilities are located, have been set at 20% and 19%, respectively. Researcher Heo commented, "With the reciprocal tariffs confirmed for the third quarter, the cost ratio burden is likely to increase compared to the second quarter," and predicted, "A significant decline in profitability in the second half of the year is inevitable."

As a result, securities firms have been lowering their expectations for Hansae Co., Ltd. following its second-quarter earnings announcement. NH Investment & Securities downgraded its investment opinion from 'Buy' to 'Neutral' and cut its target price from 15,000 won to 11,000 won. Jung Jiyoon, a researcher at NH Investment & Securities, explained, "The downgrade in investment rating and target price reflects downward revisions of 2% and 3% to our 2025 and 2026 sales estimates, respectively, and reductions of 53% and 30% to our operating profit estimates, considering the impact of tariffs in the second half," adding, "Given the company's relatively high exposure to the United States and low-cost clients within the industry, it will be difficult to expect a recovery in performance in the second half, even with a low base."

Hanwha Investment & Securities also lowered its investment opinion from 'Buy' to 'Neutral' and cut its target price from 20,000 won to 11,000 won. DB Financial Investment revised its investment opinion to 'Neutral' and reduced its target price from 18,000 won to 10,000 won. Shinyoung Securities maintained its 'Buy' rating but lowered its target price to 16,000 won, down about 43% from the previous target. Samsung Securities also maintained its 'Buy' rating and revised its target price from 15,000 won to 14,000 won.

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