[Click eStock] "Zinus, Excessive Growth Concerns Despite Anti-Dumping Risk Resolution"

Korea Investment & Securities Report
Target Price Up 43%...123,000 Won

[Asia Economy Reporter Minji Lee] Korea Investment & Securities maintained a buy rating on Jinus on the 13th and raised the target price by 43% from the previous level to 123,000 KRW. This is based on the judgment that despite the disappointing stock price trend following the resolution of the anti-dumping filing risk, Jinus is expected to embark on structural growth.

Despite the resolution of the anti-dumping risk, the stock price trend has not improved significantly. According to the announcement by the U.S. International Trade Administration (ITA) on the 28th of last month, the preliminary anti-dumping duty rate imposed on Jinus is a minimal 2.6%, whereas high tariffs ranging from 43% to 990% were applied to competitors located in Vietnam, Cambodia, and Malaysia. This was positive news for Jinus, which produces all mattresses exported to the U.S. in Indonesia.

However, while the stock prices of global peers more than doubled since April, Jinus's stock price grew by only 47% during the same period. Kiho Kim, a researcher at Korea Investment & Securities, stated, “The stock price rose 11% on the day of the preliminary anti-dumping ruling announcement but has since remained flat without any clear catalyst,” adding, “The stock prices of peer companies, which had sharply declined after the COVID-19 pandemic, have all more than doubled since April.”

Jinus's growth remains valid. The limited stock price increase despite risk resolution is due to a decrease in mattress sales in the third quarter compared to the same period last year. The decline in mattress sales, which had been increasing annually, can be interpreted as a slowdown in the growth potential of the online mattress market. The U.S. sales proportion, which was 94% last year, dropped to 86% in the third quarter, and the mattress sales proportion, which was 56%, fell to 42% in the third quarter.

However, the decrease in third-quarter mattress sales appears to be a temporary factor. Researcher Kiho Kim explained, “The decrease in third-quarter mattress sales was due to a temporary change in the purchasing pattern of clients and logistics bottlenecks caused by a sudden surge in logistics demand,” emphasizing, “It is important to note that sales outside the U.S. increased by 274%, and sales of bedroom furniture and other furniture also rose by 67% and 28%, respectively, confirming the potential for regional and category expansion.”