[Click e-Stock] "Silicontwo Expected to Maintain Solid Stock Performance... Target Price Raised"

Target Price Raised by 13.2% from Previous Level

On October 1, Korea Investment & Securities raised its target price for Silicontwo from 53,000 won to 60,000 won, expecting the stock price to maintain a solid upward trend. The investment opinion remains 'Buy'.

Kim Myoungjoo, a researcher at Korea Investment & Securities, explained, "Currently, Silicontwo is trading at a 12-month forward price-to-earnings ratio (PER) of 14.0 times, which is considered an attractive valuation level." She added, "With the gradual recovery of cosmetics export data and the growing appeal of its valuation, Silicontwo's stock price is expected to continue its positive momentum."

Silicontwo's earnings for the third quarter of this year are expected to exceed market expectations. Researcher Kim stated, "Third-quarter sales are projected to reach 310.4 billion won, up 66.3% year-on-year, and operating profit is expected to increase by 48.4% to 63.2 billion won, surpassing market expectations by 3.6%." She continued, "Despite recent concerns in the market, the outlook for U.S. cosmetics companies in the second half of this year remains positive. Since the fourth quarter of last year, Silicontwo's U.S. sales, which had been sluggish, are now showing signs of recovery. Third-quarter U.S. sales are estimated at 56.4 billion won, up 33.3% from the previous quarter." She also noted, "Compared to the second quarter, shipping costs in the third quarter are lower, and Silicontwo is not expected to spend as much on promotions as it did in the second quarter. As a result, the operating margin in the third quarter is likely to improve compared to the second quarter."

There is an opinion that concerns over sluggish exports are overstated. Researcher Kim commented, "Cosmetics companies reported disappointing results in the second quarter, and the sector's investment sentiment was damaged further by weak export data through August. In particular, the slow recovery of export data to Poland negatively impacted Silicontwo's stock price." She analyzed, "The slow recovery of export volumes to Poland is likely due to the distance between Korea and Europe and the unique characteristics of the European market. Since Silicontwo sells products to various countries within Europe from its logistics center in Poland, it is difficult to quickly clear inventory in the early stages of business expansion, unlike in a single country like the United States."

Korea Investment & Securities estimates Silicontwo's third-quarter European sales at 129 billion won, up 20.3% from the previous quarter and 200.8% year-on-year. Researcher Kim pointed out, "During the process of clearing inventory, export data may temporarily appear weak, and it is excessive to directly link this to poor European sales performance for Silicontwo."

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