[Click eStock] "Baeksan, Record High Earnings and Reopening Benefits... Target Price Up"

[Asia Economy Reporter Myunghwan Lee] Hana Financial Investment announced on the 3rd that it maintains a buy rating on Baeksan and has raised the target price from the previous 17,400 KRW to 21,300 KRW. This is due to the record-breaking performance in the first quarter of this year, along with expectations of a reopening (resumption of economic activities) and strong performance in the electric vehicle sector.

Baeksan is expected to achieve strong results, including an operating profit exceeding 13 billion KRW in the first quarter of this year. Hana Financial Investment forecasts the company's consolidated first-quarter sales to increase by 36.4% year-on-year to 129.3 billion KRW, and operating profit to rise by 39% to 13.7 billion KRW. Its subsidiary, Choesin Mulsan, is expected to turn a profit of around 2 billion KRW in the first quarter due to a recovery in orders. Baeksan's consolidated sales for this year are projected to increase by 25.4% from last year to 465.3 billion KRW, with operating profit expected to more than double by 103.4% to 47.2 billion KRW.

Hana Financial Investment analyzes that Baeksan is benefiting from the reopening. They pointed out that the reopening phenomenon has led to an increase in orders for synthetic leather used in footwear, combined with the delayed new product effects from global shoe makers, resulting in an explosive increase in orders. They expect sales to Nike to reach an all-time high and Adidas orders to exceed a 40% market share in the first quarter. The continuous increase in orders from global shoe makers and the planned expansion of production facilities in Indonesia within the first half of the year are also viewed positively.

In the vehicle sector, sales are expected to increase by 40% year-on-year to 70 billion KRW due to the addition of new car models. Since exports to North American clients are expected in the second half of the year, further sales growth is also anticipated.

Researcher Dohyun Kim of Hana Financial Investment explained the reason for raising the target price: "The global reopening phenomenon has significantly increased orders for synthetic leather used in footwear, orders for synthetic leather used in vehicles remain solid, and a turnaround is expected due to the recovery of orders at the subsidiary Choesin Mulsan."