[Click eStock] "Baeksan, Expected Benefit from Game Resumption... Sports Shoe Sales Up"

[Asia Economy Reporter Hyungsoo Park] KB Securities expects to benefit from the reopening after COVID-19.

Researcher Sang-guk Lim of KB Securities explained, "We expect sports shoe sales to increase due to optimism about economic recovery," and added, "The vehicle interior materials sector is also expected to expand the applicable vehicle models."

He continued, "Last month's shipment volume reached a monthly record high, raising expectations for improved first-quarter performance," and added, "The recent favorable exchange rate trend will also help improve performance."

He emphasized, "As of the end of last year, the order backlog recorded 35 billion KRW, marking the highest level in the past four years," and added, "The strong order backlog continues into the first quarter of this year."

Researcher Lim analyzed, "Since Baeksan's lead time is less than 45 days, an increase in order backlog directly leads to sales growth in the following quarter," and added, "With the normalization of the Vietnam factory, which had reduced operating rates due to COVID-19 last year, profitability is expected to improve."

He explained, "Sales to Adidas, one of the main customers, are increasing," and added, "As of the first quarter of this year, the proportions of Nike and Adidas sales will become similar at around 40%."

He also stated, "It is known that they are negotiating the supply of vehicle seats and other interior materials with Tesla, the world's largest electric vehicle company," and added, "If the supply is confirmed, it will act as a future growth engine."

Researcher Lim analyzed, "The subsidiary Choesin Mulsan, which had been unable to avoid losses, is also likely to turn a profit," and added, "After acquisition, idle factories were sold and personnel were reduced to cut costs."