[Overseas Stocks Spotlight] “Guheung Holdings Expected to Show Improved Performance Compared to Last Year”

[Asia Economy Reporter Eunmo Koo] Yuanta Securities has evaluated that this year, Guheung Holdings (Stella International Holdings Limited·01836 HK) will achieve improved performance compared to last year.

Guheung Holdings announced its sales performance for the fourth quarter of last year on the 14th. Sales volume in its core manufacturing business fell by 18.8% year-on-year, resulting in revenue of $280 million, down 18.9% from the previous year. Peter Chu, a researcher at Yuanta Securities, explained in a report on the 17th, “The decline in the fourth quarter was better compared to the cumulative 29% drop from January to September,” and added, “With fourth-quarter shipments exceeding expectations, the annual sales for 2020 surpassed Yuanta Securities’ forecast by 7%.”

Although fourth-quarter shipments fell 21.7% year-on-year, Guheung Holdings’ annual shipment volume reached 43.4 million pairs, exceeding Yuanta Securities’ forecast range of 39 to 41 million pairs. Researcher Chu explained, “Considering the strong product demand, some volumes with delivery dates in the first quarter of this year were shipped in the fourth quarter of last year,” and “As a result, both fourth-quarter and annual sales last year exceeded forecasts.”

This year is expected to improve compared to last year. Guheung Holdings provided guidance that first-half shipments will increase by approximately 10% year-on-year (22 million pairs), considering uncertain business prospects, but did not provide guidance for the second half. Researcher Chu projected, “To achieve the annual shipment estimate of 50 million pairs this year, second-half shipments need to increase by 21% year-on-year,” and forecasted, “This will be achieved due to the release of the COVID-19 vaccine and the base effect.”