[Click eStock] "Hanjin, Coupang Out, Ali and Temu In... Earnings Improvement in Second Half"

Existing Key Customer Coupang's Volume Likely to Decline After April
China's Ali and Temu May Offset 'Coupang Gap'
Performance Improvement Expected to Accelerate from Second Half of 2024

Daishin Securities analyzed on the 22nd that Hanjin's performance improvement will begin in earnest from the second half of this year. They maintained a 'Buy' investment rating and a target price of 30,000 KRW. Hanjin's closing price on the previous trading day was 23,650 KRW.

Researchers Yang Ji-hwan and Lee Ji-na from Daishin Securities stated, "The main customer base will change starting in 2024," adding, "The volume from Alibaba and Temu, leading e-commerce platforms in China, will increase significantly, while the volume from Coupang, the existing key customer, is expected to decline after April." The utilization rate of the Daejeon Mega Hub, which began full operation in 2024, is currently about 83%. The point at which it will operate at 100% is expected to be after May.

The two researchers said, "We expect the first quarter performance in 2024 to be similar to that of 2023, but we believe there is a high possibility of performance improvement from the second quarter at the earliest or the third quarter at the latest," and added, "The current stock price has a price-to-book ratio (PBR) of only about 0.2, which is significantly undervalued compared to competitors." They continued, "We expect the full-scale performance improvement to begin in the second half of this year, when the utilization rate of the Daejeon Mega Hub rises and automation investments in the sub-terminal are completed, but it is acceptable to buy from the current point."

Hanjin's 2024 performance guidance is sales of 3.065 trillion KRW and operating profit of 138 billion KRW. Although Coupang, which accounts for about 8% of the parcel volume after April, is scheduled to withdraw, the increase in volume from Alibaba and Temu is expected to offset the impact of Coupang's withdrawal. Researchers Yang Ji-hwan and Lee Ji-na said, "In 2024, Alibaba's parcel volume is expected to be 5 to 6 million boxes per month, and Temu's volume about 2 to 3 million boxes. Internally, Hanjin plans to handle about 10-15% of Alibaba's volume and about 70% of Temu's volume," adding, "There is also a possibility of handling more than the currently planned volume."