[Click eStock] "Zinus expects tariff windfall from production plants"... Target price 110,000 won

[Asia Economy Reporter Ji Yeon-jin] Mirae Asset Securities announced on the 4th that it expects Zinus to expand its market share due to the positive effects of resolving tariff issues, recommending a buy rating and setting a target price of 110,000 KRW.

Kang Seong-hoon, a researcher at Mirae Asset Securities, stated, "Indonesia, where the company's mattress production line is located, has been assigned a low final tariff rate of 2.22% related to anti-dumping measures, whereas most countries where competitors' production lines are located have been assigned high tariff rates exceeding double digits." He added, "As a result, Zinus is expected to maintain a relative advantage in price competitiveness."

Zinus experienced a temporary decline in profitability in the third and fourth quarters of last year due to increased logistics costs caused by COVID-19. This impact is expected to continue until the first quarter of this year, but profitability is projected to recover thereafter.

Notably, production capacity was expanded to respond to the recovery in demand in the North American market, and in the key market of the United States, consumer sentiment, which had contracted after COVID-19, has shown a stable recovery since the recent start of vaccine distribution. The U.S. mattress market size is expected to grow to approximately 22.5 billion USD in the future.

This year, sales are forecasted to increase by 21.9% year-on-year to 1.2071 trillion KRW, and operating profit is expected to rise by 74.7% to 151.7 billion KRW.