[Click eStock] "Hansae Yes24, Buy Approach When Business Conditions Recover"

Target Price Revised Downward

Hana Securities maintained its investment opinion on Hanse Industrial Co. as "Buy" on the 25th, stating that "a buy approach is valid when the business cycle recovers and orders become visible."

Seo Hyun-jung, a researcher at Hana Securities, said, "From the second half of this year, sales and profitability will both recover as the year-end consumption season and next year's orders come in." Accordingly, Hanse Industrial's sales for this year are estimated at 1.8754 trillion KRW, and operating profit at 155.2 billion KRW, representing increases of 4% and 10% respectively compared to the previous year.

The target stock price was lowered to 17,000 KRW. Researcher Seo explained the reason for the downward adjustment, saying, "Although the current 12-month forward price-to-earnings ratio (12MF PER) is 5.3 times, indicating an undervalued range, valuation pressure is recurring due to declining earnings estimates."

Hanse Industrial experienced a 44% decrease in operating profit (15.4 billion KRW) in the fourth quarter of last year compared to the previous year, due to cost increases and sluggish business conditions in the second half of last year. The operating profit margin also fell by 3.9 percentage points to 3.8%. Consolidated sales were recorded at 404.1 billion KRW. Researcher Seo noted, "Uncertainty in U.S. consumption has lowered buyers' expectations for inventory orders, leading to order slowdowns and price decline pressures for OEM companies."

She added, "Currently, orders are selectively increasing mainly from specific buyers or categories, but overall order growth is not appearing," emphasizing, "In the second half of this year, the business conditions need to gradually rebound visibly as the U.S. apparel sales growth rate rises significantly."