Daishin Securities announced on August 4 that it has lowered its target price for Hanseong from 40,000 won to 30,000 won, citing a decline in gross profit margin during the inventory depletion process. However, it maintained a 'buy' rating based on the potential for consumer recovery by year-end.
Yoo Jeong-hyun, a researcher at Daishin Securities, stated, "The second-quarter sales growth rate met market expectations," but noted, "Despite an increase in discount rates during the inventory depletion process, the additional sales growth effect was not significant." He predicted that the stock price is likely to remain stable until the third quarter due to a slowdown in domestic clothing consumption.
Daishin Securities projected Hanseong's second-quarter sales to reach 363.2 billion won, a 7% increase compared to the same period last year, while operating profit is expected to rise 525% to 4.6 billion won. However, this operating profit falls below market expectations.
Yoo commented, "With significant growth in department store channel consumption, offline sales increased by 8.7% year-on-year, and key brands recorded double-digit growth rates," indicating that overall growth was satisfactory.
However, he added, "The gross profit margin fell by 0.9 percentage points year-on-year as inventory was cleared for newly launched imported brands from 2022 to 2023, and the profitability decline during the off-peak second quarter resulted in somewhat disappointing operating profit."
He further noted, "For the time being, the growth rate of domestic clothing consumption is likely to remain in the mid-single digits, but considering the potential for consumer recovery and performance improvement by year-end, the recent stock price adjustment could present a buying opportunity."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.