[Click eStock] "SJ Group, Growth Expected with New Brand Launch in Second Half"

NH Investment & Securities Report

[Asia Economy Reporter Minji Lee] NH Investment & Securities expressed on the 3rd that SJ Group is expected to show additional growth in the second half of the year, driven by the launch of new brands.

In the first quarter, sales reached 47.9 billion KRW and operating profit was 9.8 billion KRW, marking a 32% and 45.9% increase respectively compared to the same period last year, achieving the highest quarterly performance. Among the brands, Kangol stood out with strong performance. Despite the disappearance of strong bag sales driven by new semester demand in the first quarter, Kangol maintained solid results with monthly sales exceeding 10 billion KRW in the second quarter. Kangol brand alone recorded sales of 30.3 billion KRW in the first quarter, and annual sales are expected to surpass 100 billion KRW. The strong performance of the Kangol Kids brand is believed to have contributed to the overall success of the Kangol brand.

The flagship brand Kangol Kids has established itself as a top 3 kids brand and is expected to continue high growth this year. Helen Kaminski is anticipated to benefit from rebranding in the luxury category. Sales by brand are expected to grow by 23.5%, 22.8%, and 51% year-on-year to 107.8 billion KRW for Kangol, 36.1 billion KRW for Helen Kaminski, and 49.5 billion KRW for Kangol Kids, respectively.

Annual performance is estimated at 197.2 billion KRW in sales and 35.9 billion KRW in operating profit, representing growth of 31.7% and 23.3%, respectively. Junki Baek, a researcher at NH Investment & Securities, said, “The expected PER (price-to-earnings ratio) for this year’s forecasted performance is 8.3 times, which is considered an attractive valuation,” adding, “In the second half, with the upcoming launch of new clothing brands such as Pan Am and LCDC, both valuation appeal and growth potential will stand out.”

Pan Am, scheduled to launch around July this year, is expected to see a favorable market rebound based on feedback from the April showcase. Researcher Baek explained, “Pan Am plans to open about 10 stores in the second half of the year, and meaningful sales contributions are expected from next year,” and added, “LCDC plans to expand store openings mainly in large department stores starting in the second half of this year, which will begin contributing to profits.”