Shinhan Investment Corp. analyzed on the 10th that Silicon Two is a beneficiary stock due to the rapid increase in exports of Korean indie beauty brands to the United States. No investment opinion or target price was presented.
Park Hyunjin, a researcher at Shinhan Investment Corp., said, "As exports of Korean indie beauty brands to the U.S. surge, Silicon Two, which has a U.S. distribution infrastructure, is expected to be the biggest beneficiary," adding, "Among consumer goods companies, it is rare to see such a growth rate, and earnings expectations are steadily being raised after the second quarter of this year."
Sales and operating profit in the first quarter were 149.9 billion KRW and 29.4 billion KRW, respectively, increasing by 158% and 297% compared to the same period last year. He analyzed, "Strong performance was achieved due to increased exports of Korean indie beauty brands to North America," and "The margin improvement exceeding the sales growth rate means that Silicon Two holds a negotiation advantage over brand companies when negotiating product purchase prices."
He said, "Exports to the U.S. remained steady in the second quarter," and added, "As of the end of the first quarter, Silicon Two's inventory increased by 33% compared to the previous quarter, and given the nature of the core business where all inventory is purchased and then sold, the quarterly increase in inventory predicts the strength of earnings growth in subsequent quarters." He further added, "Considering the inventory trend, sales flow in the second and third quarters is expected to be strong."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
