[Click eStock] "Zinus, Risk Resolved... Stock Price Rebound Accelerates"

Daishin Securities Report
"Expecting Concurrent Growth in Scale and Profit Based on Price Competitiveness"

[Asia Economy Reporter Minji Lee] Daishin Securities maintained a buy rating and a target price of 130,000 KRW for Jinus on the 30th. This decision was based on the judgment that the risk related to the US anti-dumping preliminary ruling has been resolved, eliminating downward pressure on the stock price.

In the third quarter, Jinus recorded an operating profit of 34.5 billion KRW, an 8% increase compared to the same period last year. Sales reached 271.7 billion KRW, rising approximately 19% from a year earlier. This appears to be in line with market expectations (sales 272.8 billion KRW, operating profit 36.2 billion KRW).

Bedroom furniture sales, which increased by 70.1% year-on-year to 147.2 billion KRW, are analyzed to have driven the top-line growth. Mattress and other furniture sales were 115.2 billion KRW and 9.8 billion KRW, respectively. Mattress sales decreased by about 6%, but the other segment grew by approximately 30%.

Strong growth was also seen overseas. Daishin Securities researcher Han Kyung-rae said, “Global sales outside the US recorded 39.4 billion KRW, growing about 274% year-on-year.”

The US anti-dumping preliminary tariff rate on Indonesia was applied at 2.61%, which is considered to have resolved the anti-dumping issue. The US Department of Commerce’s preliminary anti-dumping ruling for seven countries imposed high tariff rates of 572.56%, 939.9%, and 42.92% on Thailand, Vietnam, and Malaysia, respectively. Indonesia was subject to the lowest tariff rate at 2.61%. Within Indonesia, there are only 2 to 3 small manufacturers besides Jinus.

Researcher Han explained, “Jinus is expected to seize business expansion opportunities due to the anti-dumping issue and is anticipated to achieve simultaneous growth in scale and profit through securing profitable orders. The resolution of anti-dumping risks also positively impacts logistics cost reduction by restoring the proportion of direct orders from US customers.”

He added, “By maximizing yield in the first half of next year, Jinus plans to secure a monthly production volume of 100,000 memory foam mattresses by the end of the year. The internalization rate is expected to increase in line with rapidly growing demand.”