[Click eStock] "Hanssem, Strong Q1 Performance... Continued Growth of Rehouse"

[Asia Economy Reporter Minji Lee] Cape Investment & Securities maintained its buy rating and target price of 140,000 KRW for Hanssem on the 21st, based on the expectation that rehouse sales will continue to increase due to rising demand for home renovations.

In the first quarter, Hanssem recorded consolidated sales of 553.1 billion KRW, expected to grow 12% compared to the same period last year. The rehouse segment grew by 21%, and offline furniture (28%) and online furniture (36%) segments also expanded, leading to overall growth despite an 11% decline in B2B.

Rehouse segment sales in March reached 63.7 billion KRW, surpassing the previous peak of 61.1 billion KRW in November last year. Kim Misong, a researcher at Cape Investment & Securities, explained, “Considering that the first quarter is an off-season yet monthly sales exceeded the record within four months, demand for home renovations is expected to remain steady. The number of direct construction packages increased by 24% quarter-on-quarter to 1,823 cases.”

B2C furniture growth was also notable, attributed to the expansion of offline stores and online discount events. The number of offline stores increased to 25 by the end of last year, up by 8 from the end of 2019. There are plans to expand the number of stores by 8 to 10 by the end of this year. With the increase in stores, furniture sales are expected to continue growing at a rate exceeding 20%.

Consolidated operating profit was 25.2 billion KRW, up approximately 47.4% from the same period last year, exceeding market expectations by about 6%. Researcher Kim said, “Despite the off-season for rehouse packages, growth was strong, and the growth potential of B2C furniture sales was confirmed.”

Future stock prices are expected to correlate with the number of rehouse package construction cases. On the demand side, due to tax regulations such as capital gains tax, the proportion of homeowners living in their own homes is increasing, which is expected to boost demand for home renovations. On the supply side, the bottleneck is being resolved by large-scale hiring of construction personnel, which was insufficient in the second half of last year.

Researcher Kim added, “Due to the base effect from last year, growth rates may slow from the second quarter, and cost burdens will increase with the expansion of offline stores, but sales growth is expected to offset these.”