[Asia Economy Reporter Son Sunhee] Shinhan Investment Corp. significantly lowered the target price for fashion company Hansome from 45,000 KRW to 33,000 KRW on the 8th.
Hansome recorded sales of 451.9 billion KRW (consolidated basis) in the fourth quarter of last year, a 1.5% increase compared to the same period the previous year. However, operating profit fell short of market expectations, decreasing by 4.9% to 49.2 billion KRW during the same period.
Although annual sales increased, investor attention is expected to focus on the slowdown in sales growth compared to the previous quarter. The fashion market consumption was sluggish due to higher-than-average temperatures in October and November last year. In particular, sales of cosmetic brands were weaker than expected.
Shinhan Investment Corp. expects it will be difficult for Hansome's sales growth rate to significantly improve in the first quarter of this year. The sustained high interest rate environment is causing concerns about consumption contraction to become a reality. However, it is necessary to observe whether the expansion of cosmetics and overseas fashion brands can serve as a sales growth momentum.
Researcher Park Hyunjin of Shinhan Investment Corp. explained the reason for lowering the target price, stating, "In a situation where uncertainty in the domestic consumption market is increasing, it seems inevitable to adjust this year's earnings estimates," adding, "Considering growth potential, we have lowered the estimates and target valuation level." He further added, "We recommend an investment approach from a mid- to long-term perspective."
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