[Click eStock] "Youngone Trading passes earnings bottom... Stock price expected to recover in earnest"

Daishin Securities expected that Youngone Corporation's stock price would begin to recover significantly following the passing of its earnings bottom on the 8th. They maintained a 'Buy' investment rating and a target price of 56,000 KRW.

Daishin Securities projected that Youngone Corporation's operating profit for the third quarter would decrease by 23% year-on-year to 139.4 billion KRW. Researcher Yoo Jeong-hyun from Daishin Securities stated, "In the Original Equipment Manufacturer (OEM) business, sales began to increase from the third quarter, and despite the impact of the minimum wage increase in Bangladesh reflected quarterly this year, the operating profit margin is expected to reach around 25%. Although related costs are expected to be incurred due to a one-week factory shutdown caused by political instability in Bangladesh at the end of July, this will not significantly affect the earnings." He added, "Accordingly, operating profit, which had been declining since the third quarter of last year, is expected to turn upward again from the third quarter of this year."

Researcher Yoo also noted, "The Scott division has experienced continued sales decline and operating losses due to excess inventory and weak demand leading to discount sales. The downturn is expected to persist until the end of the year, but most of it is likely to be resolved within this year." He further predicted, "The stock price began to rebound from the earnings bottom in the first half of the year, and reflecting the improvement in earnings in the second half, it will now recover in earnest."