Shinhan Investment Corp. analyzed on the 22nd that Clio's overseas sales growth is strengthening, including laying the groundwork in Japan. The investment opinion remains 'Buy' with a target price of 40,000 KRW.
On the 19th of this month, Clio announced the acquisition and merger (M&A) of Japan's Dowon and Kiwami, along with the establishment of a Japanese corporation. Dowon acts as a distributor for offline retailers in Japan. About 48% of Clio's sales in Japan were conducted through Dowon. Another corporation, Kiwami, is a customs clearance agency in Japan.
Hyunjin Park, a researcher at Shinhan Investment Corp., said, "Dowon's sales last year were around 22 billion KRW, but it is understood that most of it came from Clio," adding, "The advantage of reflecting consolidated earnings is low."
However, he added, "It is positive that through the M&A, Clio now has a local corporation in Japan and has secured a network with local employees (about 20 people)."
He explained, "Since the fourth quarter of last year, sales of the Japanese corporation have turned to growth, and this year's sales target for Japan is a 20-25% increase compared to the previous year," adding, "With the announcement of the establishment of the Japanese corporation, the sales target for Japan was raised to a 30% growth compared to the previous year."
He also expressed expectations for growth in China. He said, "It is understood that sales in China also grew in the first quarter, and it is expected that Clio's overseas sales ratio will exceed 50% within this year."
He explained, "Although there are concerns about the burden of operating expenses due to increased marketing costs in the first quarter, it is positive that sales growth has returned in Japan and China, where sales had been sluggish," adding, "The effect of earnings increase from the M&A is not large, but it is judged that operational synergy can accelerate the recovery of Japanese performance."
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