[Click eStock] "Golfzon, Continued Earnings Growth... Target Price Down Due to Discount Rate Pressure"

On the 29th, Eugene Investment & Securities downgraded the target price for Golfzon, citing continued earnings growth driven by new product launches but noting concerns over valuation gaps. The investment rating was maintained at 'Buy.'

Researcher Park Jong-sun stated, "Despite the off-season, sales and operating profit exceeded market expectations due to the new product launch," adding, "Sales reached 166.5 billion KRW and operating profit 14.7 billion KRW, representing increases of 17.8% and 97.7% year-on-year, respectively, with operating profit delivering an earnings surprise."

Park noted, "The provisional full-year 2023 consolidated results showed sales of 685.1 billion KRW, up 10.9% year-on-year, while operating profit decreased by 23.0% to 114.5 billion KRW," explaining, "The increase in sales was due to franchise and overseas businesses growing by 24.9% and 31.9%, respectively, offsetting a 29.6% decline in the GDR business compared to the previous year."

He added, "In the first quarter, stable earnings growth is expected to continue due to the peak season and the effect of new product launches," forecasting, "Sales of 190.9 billion KRW and operating profit of 44.2 billion KRW, up 2.1% and 6.5% year-on-year, respectively."

Furthermore, he said, "Entering the peak season, sales of the new product ‘ToBeVision NX’ are expected to gradually increase, driving earnings growth," highlighting, "The number of franchise stores rose 16.3% year-on-year to 2,546, and the number of rounds played increased by 7.5%, sustaining the growth trend, which is positive."

He concluded, "The target price has been lowered from 120,000 KRW to 110,000 KRW due to valuation gap concerns, but the investment rating of 'Buy' is maintained."