[Asia Economy Reporter Hyungsoo Park] JS Corporation is showing strong performance. Following its record-breaking third-quarter earnings, the outlook for continued improvement in results appears to be influencing its stock price.
As of 9:33 AM on the 26th, JS Corporation is trading at 25,550 KRW, up 10.85% from the previous day.
Daishin Securities has raised JS Corporation's target stock price from 38,000 KRW to 42,000 KRW, maintaining a 'Buy' rating.
Researcher Han Kyung-rae of Daishin Securities explained, "On a consolidated basis, third-quarter sales increased by 195.3% year-on-year to 294.5 billion KRW, and operating profit surged 1922.9% to 24.9 billion KRW."
He added, "Due to shipment delays, approximately 20 billion KRW in sales were deferred to the fourth quarter, while operating profit exceeded market expectations of 22 billion KRW by 14%."
He analyzed, "Third-quarter apparel sales rose 34% year-on-year to 234.9 billion KRW, and handbag sales increased 55% over the same period to 59.5 billion KRW."
Researcher Han estimated, "The third-quarter operating margin improved significantly by 7.3 percentage points year-on-year to 8.5%. Considering the pace of improvement, we are revising upward both the fourth-quarter and next year's earnings forecasts."
According to a survey by the US investment bank Piper Sandler on the top 10 fashion trends in the US, the most preferred handbag brand was Michael Kors, followed by Coach in third place and Kate Spade in fourth. JS Corporation produces various handbags for these brands as well as for Guess and Burberry through Original Equipment Manufacturing (OEM) and Original Design Manufacturing (ODM) methods.
Researcher Han projected that JS Corporation will achieve sales of 1.0094 trillion KRW and operating profit of 73.5 billion KRW next year. He emphasized, "The stock is undervalued at a price-to-earnings ratio (PER) of 5.5 times next year, which is difficult to justify. A revaluation in line with earnings is necessary."
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