[Click eStock] "Golfzon, Sales Increase Across All Divisions... Stock Price Undervalued"

On the 26th, Eugene Investment & Securities maintained its investment opinion of 'Buy' on Golfzon and kept the target price at 170,000 KRW.

Golfzon's preliminary first-quarter results (consolidated basis) showed sales of 187 billion KRW and operating profit of 41.5 billion KRW, representing a 21.5% increase in sales and an 18.2% decrease in operating profit compared to the same period last year. Sales were similar to market expectations, but operating profit fell short.

The increase in sales was driven by higher hardware sales in franchise and non-franchise sectors, GDR, and overseas businesses. Additionally, the performance of subsidiaries such as Golfzon Deca was reflected. Notably, the number of rounds increased by 10.3% year-on-year to 24,370 rounds due to the growth in franchise stores and screen golfer subscribers, which is a positive factor.

However, the 10.8 percentage point decline in operating profit compared to the same period last year appears to be due to an increased proportion of low-margin hardware sales and fixed costs from overseas directly operated stores.

Golfzon's expected second-quarter results are sales of 169.1 billion KRW and operating profit of 44.8 billion KRW, representing a 15.7% increase in sales and a 1.8% decrease in operating profit compared to the same period last year.

Jongseon Park, a researcher at Eugene Investment & Securities, analyzed, "Golfzon's current stock price is trading at a price-to-earnings ratio (PER) of 5.8 times based on 2023 estimates, discounted compared to the domestic similar and peer average PER of 7.0," and added, "With an upside potential of 55.1%, we maintain the investment opinion of 'Buy.'"