[Click e-Stock] "Youngone Corporation Stands Out for Earnings Resilience Amid Tariff Uncertainty"

On May 16, SK Securities maintained its "Buy" investment rating and a target price of 62,000 won for Youngone Corporation, stating, "Despite ongoing uncertainties regarding tariffs, the company continues to demonstrate strong earnings resilience."

In the first quarter, Youngone Corporation posted sales of 811.3 billion won and operating profit of 82.3 billion won. These figures represent increases of 14.3% and 15.9%, respectively, compared to the same period last year. Operating profit also exceeded the market consensus of 75.7 billion won. Hyung Kwonhun, a researcher at SK Securities, explained, "The main OEM division showed signs of recovery after inventory adjustments were completed, and the company was able to defend its earnings based on orders from high-brand-power clients such as Lululemon and Arc'teryx."

The OEM division recorded sales of 538.5 billion won, up 15.2% year-on-year, and operating profit of 106.1 billion won, up 27.5%. In contrast, the SCOTT division continued to struggle, posting sales of 226.2 billion won and an operating loss of 28.1 billion won, amid the burden of inventory clearance in the global bicycle market.

Researcher Hyung predicted, "In the second quarter, the OEM division is expected to maintain its solid performance, supported by continued recovery in orders." In contrast, regarding SCOTT, he pointed out, "Operating losses are likely to persist through the end of the year due to ongoing inventory clearance," and added, "Considering seasonality, the operating loss in the second half is expected to widen compared to the first half."

He further noted, "Since trade negotiations are still ongoing, there is significant uncertainty regarding the impact of tariffs on the company’s performance." However, he analyzed, "Because the proportion of sales to the US is relatively low, the company should be able to offset any performance decline from a general tariff rate of around 10% with topline growth."