[Click eStock] "Hansome, Reopening Effect... Strong 2Q Earnings Expected"

[Asia Economy Reporter Hwang Yoon-joo] Hana Financial Investment maintained a 'Buy' rating and a target price of 50,000 won on the 10th for Handsome, expecting continued earnings momentum driven by reopening and expansion of the cosmetics business.

Seo Hyun-jung, a researcher at Hana Financial Investment, stated, "Despite being an off-season, sales and operating profit in the second quarter are expected to increase by 9% and 16%, respectively."

Researcher Seo analyzed, "Starting from the second quarter, marketing and store expansion costs will occur as we actively expand imported perfume select shops and the cosmetics business," adding, "Therefore, we assume a slight increase in the selling and administrative expense ratio."

Additionally, Researcher Seo evaluated that the offline business conditions are also recovering rapidly.

He diagnosed, "Department stores and outlet channels are normalizing with the full-scale reopening," and "Despite the increasing base burden, Handsome is estimated to have recorded a favorable sales growth rate of over 10% in April."

However, he pointed out that the resumption of global travel is an uncertainty factor as demand for luxury and high-end brands may shift to overseas travel. Researcher Seo explained, "Currently, it seems appropriate to weigh the effects of reopening and recovery in consumer sentiment more than the base burden and concerns about the resumption of global travel."

He continued, "At least until the second quarter, a solid earnings momentum based on domestic consumption capacity will continue," but added, "Concerns about earnings slowdown will be a burden as we move into the second half."