[Click eStock] "Hansome, Hit by Consumption Contraction... Target Price Down"

[Asia Economy Reporter Son Sunhee] Kiwoom Securities maintained its investment opinion on the apparel company Hansome as 'Buy' on the 27th but lowered the target price from 43,000 KRW to 37,000 KRW.

Hansome's consolidated sales for the fourth quarter of last year are expected to reach 459.3 billion KRW, with an operating profit of 48.9 billion KRW, falling short of market expectations. Sojung Cho, a researcher at Kiwoom Securities, attributed the poor performance to "high base effects and a challenging business environment," adding, "Domestic consumption sentiment weakened in the fourth quarter, and the weather in November was warmer than usual, so winter apparel sales are expected to fall short of previous expectations." She further noted, "Due to the launch of new brands and the opening of existing brands, related commission and marketing expenses are expected to increase, causing a slight decline in profitability."

External conditions are also unfavorable, with consumer sentiment shrinking amid concerns about an economic downturn. Hansome is known to plan continued investment in nurturing existing brands and launching new brands for mid- to long-term growth. This year, they plan to launch an additional 5 to 10 imported brands such as Totem and Veronica Dear, and new openings of existing brands are also scheduled. Although related marketing and other expenses are expected to increase, steady investment to strengthen Hansome's brand portfolio is positively evaluated from a mid- to long-term perspective.

Researcher Cho stated, "The textile and apparel industry is sensitive to the economy, so it is difficult to completely avoid the impact," but added, "However, since the company has strong capabilities in the high-end market, the damage from the economic slowdown is expected to be relatively limited."