Hankook Securities announced on August 5 that it has lowered its target price for Zinus to 11,000 won, citing intensified price competition with rivals in the U.S. market. However, the firm maintained its investment rating at 'buy' due to the potential for improved performance in the second half of the year.
Park Jong-ryul, a researcher at Hankook Securities, stated in a report that Zinus experienced a significant decline in mattress sales to major customer Amazon following a price increase in October of last year aimed at addressing tariffs. This led to weaker-than-expected second-quarter results.
He noted, 'Competitors have maintained their prices, leading to a more intense price competition.' However, he also expressed optimism, stating that the mattress order segment from Amazon is expected to gradually improve in the second half of the year as consumer price resistance eases, alongside growth in non-mattress sales, such as frames.
Reflecting the weaker-than-expected second-quarter results, Park adjusted the annual performance forecast downward. He added, 'The one-time costs related to the shutdown of the Georgia plant have already been accounted for in the first quarter, and if the situation is resolved through sale or re-lease within the first half of the year, it will positively contribute to operating profit.'
Additionally, he mentioned that restructuring efforts for the expanded production facilities and sales subsidiaries established since 2015 are planned to be completed by the first half of next year at the latest.
* This article has been translated by AI.
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