[Click eStock] "Clio Expected to Achieve Double-Digit Growth This Year... Target Price Maintained"

2024 Annual Sales Target Surpasses 400 Billion KRW
Double-Digit Growth Expected Mainly Overseas
Q1 Earnings Miss Consensus "Focus on Sales Growth"

Hana Securities analyzed on the 8th that Clio is expected to continue double-digit growth mainly overseas. They maintained a 'Buy' investment rating and a target price of 43,000 KRW. Hana Securities' previous trading day closing price was 29,500 KRW.

Research analysts Eunjeong Park and Dahye Kim of Hana Securities stated, "Clio aims to surpass 400 billion KRW in consolidated sales in 2024 through global market share expansion and brand diversification," adding, "Investments to expand overseas sales channels in the US, Japan, Southeast Asia, and China, as well as increased marketing expenditures to foster new brands, are expected." They judged these as necessary investments to lay the foundation for external growth over the next five years (expanding sales channels and brand diversification).

Accordingly, this year, the leverage effect from volume expansion is expected to be somewhat diminished, leading to a 1 percentage point downward revision in the operating profit margin forecast compared to the previous estimate. The two analysts projected, "Clio's 2024 performance is expected to reach consolidated sales of 390 billion KRW and operating profit of 41.4 billion KRW," assuming 12% growth domestically and 28% growth overseas, with double-digit growth continuing mainly overseas.

Clio's first-quarter results are expected to show consolidated sales of 91.1 billion KRW and operating profit of 6.6 billion KRW, approximately 20% below the consensus (market average forecast) of 8.2 billion KRW operating profit. This is due to concentrated marketing expenses in the first quarter aimed at expanding global market share across the US, Japan, Southeast Asia, and China. Analysts Eunjeong Park and Dahye Kim emphasized, "It is necessary to focus on sales rather than cost burdens," noting, "The company rapidly grew its scale with double-digit sales increases from 2022 to 2023. Although there might be a base effect burden, sales still grew over 20% in the first quarter, demonstrating solid demand." First-quarter domestic and overseas sales are expected to be 56.6 billion KRW and 34.4 billion KRW, respectively, representing year-on-year growth of 13% and 37%.