[Click eStock] "Hansome secures downside rigidity through efforts to enhance shareholder value... Target price lowered"

Target Price Lowered by 17% Compared to Previous Level

Daishin Securities lowered the target price for Handsome from 24,000 KRW to 20,000 KRW on the 10th, viewing that the momentum for earnings improvement is unlikely to be highlighted in the short term. The investment rating was maintained at 'Buy.'

Yoo Jung-hyun, a researcher at Daishin Securities, explained, "The target price downgrade is due to the earnings revision downward," adding, "Since the momentum for earnings improvement is unlikely to be highlighted in the short term, the stock price is expected to remain sideways for a while, but we believe that the downside rigidity of the stock price has been secured through active efforts to enhance shareholder value."

Handsome's fourth-quarter earnings last year recorded sales of 435.7 billion KRW, down 4% year-on-year, and operating profit of 20.9 billion KRW, down 34%. Researcher Yoo analyzed, "Due to deteriorating consumer sentiment, economic recession, and structural demand slowdown for high-end suits, sales of Handsome's main brands such as women's character and men's lines were sluggish," adding, "The growth rates of offline and online channels in Q4 were -4.7% and -1.4%, respectively, both declining compared to the same period last year. Operating profit also continued to decline due to the decrease in sales."

The active efforts to enhance shareholder value are evaluated positively. Hyundai Home Shopping, the largest shareholder, announced on the 24th of last month a public tender offer plan for Handsome shares undervalued due to the domestic economic recession and poor earnings. The tender offer price is 14,400 KRW per share, and the tender offer quantity is 330,000 shares (approximately 1.5% stake). Researcher Yoo stated, "This is judged to indicate an intention to strengthen responsible management for expanding control over a high-quality subsidiary and boosting the stock price," adding, "Recently, the active involvement of Handsome and its parent company, Hyundai Department Store Group, to enhance shareholder value is positive for investment sentiment."