[Click eStock] Hanse Industrial... Best Performance, Lowest Stock Price

[Asia Economy Reporter Lee Seon-ae] Meritz Securities announced on the 11th that it maintains a buy rating on Hanse Industrial and sets the target price at 25,000 KRW. The target price was lowered from 29,000 KRW on August 16. However, considering solid earnings, undervaluation appeal, and a high dividend policy, it judged that the stock price decline was excessive and recommended a low-price buying approach.

Hanuri, a researcher at Meritz Securities, stated, "Hanse Industrial's Q3 2022 sales reached 602 billion KRW, up 44.6% year-on-year, operating profit was 56.6 billion KRW, up 216.0%, and net profit is expected to turn positive at 30.3 billion KRW, exceeding market expectations," emphasizing, "All factors including mix improvement and yield enhancement are harmonious."

He added, "Considering the high dividend policy (dividend yield of 4.3% and payout ratio of 23% as of the closing price on the 7th), the stock price decline (-36%) is excessive," and noted that a low-price buying approach is valid.

However, the global apparel export sector is showing warning signs. Economic downturns are worsening consumer sentiment, leading to sluggish sales and inventory burdens. Clients are focusing on depleting inventory and conservatively setting new order volumes. Researcher Han said, "Performance improvement based on market share increase (due to global supply disruptions, accelerated de-China shifts, bankruptcies of small and medium-sized companies, and concentration of orders to large vendors) and mix improvement (high-priced product ratio: 12% in 2021, 25% in 2022E, 35% in 2023E) remains valid," adding, "Production diversification such as additional expansion in Latin America (duty-free exports to the US) and new factory operations in Myanmar (duty-free exports to the EU), as well as fabric business expansion, are also attractive."