[Featured Stock] Hojun Industrial, Post-COVID Undervalued Apparel Stock... Operating Profit 13 Times in Super Boom Phase

[Asia Economy Reporter Hyungsoo Park] Hojun Industrial, which supplies clothing to global sportswear companies such as The North Face, Under Armour, Athleta, and Lululemon, is seeing its stock price rise. Orders are increasing as home training and camping gain popularity due to the impact of COVID-19.

As of 9:17 a.m. on the 31st, Hojun Industrial is trading at 16,350 KRW, up 15.14% from the previous trading day.

Hana Financial Investment analyzed that Hojun Industrial's order volume is rapidly increasing as the global apparel market recovers.

Choi Jae-ho, a researcher at Hana Financial Investment, predicted, "Starting from the second half of this year, the order volume will increase year by year as it reflects sales from the world's number one athleisure brand, Lululemon."

He explained, "The order amount from The North Face recorded about 100 million USD in 2019 but decreased by about 25% last year," adding, "This year, it is expected to record the highest order amount ever."

He continued, "It is estimated that the order amount received so far is already over 100 million USD," emphasizing, "Considering additional orders in the second half of this year, the order amount this year will surpass that of 2019."

Researcher Choi also analyzed, "The growth of the athleisure market, which has taken root due to COVID-19, is still in its early stages," and predicted "a full-scale performance growth for Hojun Industrial, which mainly produces high-performance clothing using woven materials."

Hojun Industrial is estimated to achieve sales of 320.8 billion KRW and operating profit of 20.2 billion KRW this year, representing increases of 9.7% and 1246.7% respectively compared to last year. Researcher Choi stated, "Currently, the stock price is only trading at a PER of 6.3 times based on 2022 performance," and set a target price of 22,500 KRW.

Lee Sang-heon, a researcher at Hi Investment & Securities, said, "The number of new clients has increased annually from 17 in 2019 to 23 this year," and predicted, "Sales will begin from August this year as they secured Lululemon, the world's number one athleisure brand, as a new client."

He emphasized, "The stock is trading at a PER of 9.3 times based on this year's expected EPS," adding, "As the impact of COVID-19 eases, demand for sportswear and specialized functional outerwear is increasing overseas, including in the United States."