[Click e-Stock] "Hwaseung Enterprise Expected to Recover Orders Ahead of 2026 World Cup"

원본보기 아이콘

On November 27, DS Investment & Securities analyzed that Hwaseung Enterprise is expected to recover orders in line with the 2026 North and Central America World Cup, overcoming this year’s poor performance.

Kim Suhyeon, a researcher at DS Investment & Securities, stated, “Due to Adidas’s conservative inventory policy ahead of the 2026 North and Central America World Cup, the visibility of earnings for the second half of 2025 has significantly decreased.”

Hwaseung Enterprise posted a third-quarter earnings shock, with revenue of 355.8 billion won (down 8% year-on-year) and operating profit of 100 million won (down 99% year-on-year), due to deferred sales from tariff issues in the second quarter and reduced orders from clients in the third quarter. Kim forecasted, “In the fourth quarter, the decline in order volume from clients will continue to lower the utilization rate and maintain the burden of fixed costs.”

However, expectations are rising for a World Cup-driven boost in 2026 and the entry into a new product cycle. Kim noted, “Although vulnerability to Adidas’s inventory adjustment cycle is a weakness, the popularity of the Originals line (Samba, Gazelle) continues, and demand for performance lines such as running and training remains solid.”

He also emphasized, “From the second quarter, inventory buildup in preparation for the North and Central America World Cup is expected to begin, which will likely lead to a gradual increase in order volume. An increased proportion of orders for high-priced products will provide a structural advantage, maximizing profit leverage if orders normalize in 2026 alongside a rise in ASP.”

Kim projected strong growth for 2026, forecasting revenue of 1.74 trillion won (up 10.5% year-on-year) and operating profit of 88.4 billion won (up 227.3% year-on-year).

There is also a possibility that the stock price momentum will recover soon. He said, “This year’s poor performance in the second half has already been reflected in the stock price. If expectations for order recovery next year are confirmed by a relaxation of Adidas’s inventory policy, order recovery, and improved utilization rates between the fourth quarter of this year and the first quarter of next year, the stock price is likely to respond quickly.”

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.