[Click eStock] "Youngone Corporation, Strong Earnings Improvement Momentum Next Year Despite Tariff Impact"

Target Price Raised to 80,000 Won

On October 1, Daishin Securities stated regarding Youngone Corporation, "While margins are expected to decline somewhat from the third quarter of this year due to tariff burdens, there is significant momentum for overall earnings improvement next year." The company raised its target price by 14% to 80,000 won and maintained its "Buy" investment rating.

Youngone Corporation's consolidated sales for the third quarter are projected to reach 1.151 trillion won, an 8% increase year-on-year, while operating profit is expected to rise 9% to 114.3 billion won. From the third quarter, the expansion of tariff application is expected to lower order prices, and increased labor costs due to local subsidiary workforce expansion are likely to reduce margins in the OEM segment. Operating profit for the OEM segment in the third quarter is expected to decrease by 18% compared to the previous year.

However, Daishin Securities analyzed that stable orders from top OEM clients and sales growth from expanding brands such as Arc'teryx are supporting overall performance. It is also positive that sales from regions affected by tariffs account for only about 30% of the total. Daishin Securities researcher Yoo Junghyun commented, "Sales growth is expected to partially offset the margin decline."

In addition, the loss reduction in the bicycle brand Scott segment is accelerating. Researcher Yoo stated, "Although discount sales due to sluggish demand are continuing, sales have expanded this year thanks to increased sales of new products, so the operating loss for the third quarter is expected to shrink significantly from 67 billion won last year to 22 billion won."

Researcher Yoo emphasized, "Given that the estimated price-earnings ratio (PER) for 2026 is less than 6 times and the momentum for earnings improvement, the valuation is highly attractive and investment appeal is very strong."

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