[Click eStock] "Hojun Industrial expects Lululemon orders and exchange rate benefits this year"

[Asia Economy Reporter Ji Yeon-jin] NH Investment & Securities announced on the 1st that Hojeon Industrial is expected to benefit from the rising exchange rate as orders for this year's yoga wear brand Lululemon increase significantly.

Baek Jun-gi, a researcher at NH Investment & Securities, explained, "In the first quarter of this year, an improvement in the deficit is expected due to the exchange rate effect and increased sales from non-outdoor clients such as Lululemon," adding, "Most sales are generated in US dollars, while wages and labor costs at local factories (Indonesia, Vietnam, etc.) are paid in local currencies." The company has previously shown favorable stock performance when the exchange rate rises.

Hojeon Industrial's sales in the first quarter of this year increased by 24.1% year-on-year to 69 billion KRW, and an operating loss of 600 million KRW is expected to continue.

However, sales related to Lululemon are expected to surge from around 500,000 USD in 2021 to over 20 million USD this year. Lululemon utilizes about 40 global vendors, and Baek expects that Hojeon Industrial's increased market share within Lululemon will contribute to enhancing corporate value.

In addition to Lululemon, the company is handling orders worth 50 million USD for GAP's athleisure brand Athleta, and stable growth in sales related to major clients The North Face and Under Armour is also anticipated. The North Face is projected to generate sales of approximately 110 million USD, and Under Armour around 50 million USD, showing slight growth compared to last year.

Sales this year are expected to increase by 13.8% to 392.6 billion KRW, and operating profit is forecasted to rise by 29.8% to 26.8 billion KRW.