[Click eStock] "Silicon2, Triple-Digit Sales Growth in H1... Expectations for Q3 as Well"

Shinhan Investment Corp. forecasted on the 14th that Siliconto's sales growth would continue through the third quarter, noting a triple-digit sales growth rate in the first half of the year alongside an increase in purchased inventory.

Researcher Park Hyunjin stated, "As exports of Korean indie beauty low-priced brands to the U.S. surged, Siliconto, well known among U.S. distributors, has rapidly gained merit," adding, "It has been showing triple-digit performance growth throughout the first half of this year, raising market consensus."

He further noted, "As of August, performance trends appear similar to the previous quarter's market conditions," and added, "Although the previously risen stock price growth rate is a burden, considering the performance growth rate, it still requires renewed attention as a growth stock."

Siliconto recorded year-over-year sales growth rates of 158% in the first quarter and 132% in the second quarter. Operating profit increased by 297% and 275%, respectively, significantly surpassing the sales growth rate.

Researcher Park evaluated, "As the scale of purchased inventory for distribution brands naturally expanded, the operating leverage effect was also maximized," and "The U.S. sales proportion remains at 34%, with a sales growth rate of 127%, maintaining a strong performance." He also noted sales growth in Korea, Australia, Cambodia, and other countries.

He continued, "Exports from the top six customers remain solid, and some small and medium-sized brands among listed companies are also increasing their U.S. distribution volumes," adding, "While the dollar exchange effect seems positive, most of the impact is presumed to be due to increased demand."

He concluded, "At the end of the second quarter, inventory increased by 34% compared to the previous quarter. Given the nature of the core business, where all inventory is purchased and then sold, the increase in inventory compared to the previous quarter predicts the strength of performance growth in subsequent quarters," and forecasted, "Considering the inventory trend, sales momentum is expected to remain strong in the third quarter as well."