[Click e-Stock] "Time to Focus on Classys's Highly Visible Fundamentals... Target Price Up"

On June 23, LS Securities stated that it is time to focus on Classys's highly visible fundamentals rather than on uncertain sale issues, and raised its target price from 75,000 won to 80,000 won. The investment opinion of 'Buy' was maintained.

Jo Eunae, a researcher at LS Securities, explained, "We raised the target price to reflect our upward revision of expected earnings," adding, "The high growth in Ballnewmer equipment sales expected in 2025 will drive a higher level of consumable sales, which is likely to become a lever for mid- to long-term growth accompanied by improved profitability in 2026. As the visibility of both revenue and profit growth increases at this point, it presents a buying opportunity."

Classys's earnings for the second quarter of this year are expected to exceed market expectations. Researcher Jo stated, "We expect second-quarter sales to reach 85.3 billion won, up 5% year-on-year, and operating profit to rise 38% to 42.9 billion won, both surpassing consensus estimates. With the export effect of Ballnewmer equipment, which began sales in major countries last year, strong quarterly growth in equipment sales is anticipated. In addition, the benefit from inbound tourists and the increasing contribution of Ballnewmer consumables are expected to drive a continued steady upward trend in consumable sales."

LS Securities forecasts Classys's annual sales this year at 376 billion won and operating profit at 190.5 billion won, up 55% and 56% respectively from the previous year. Researcher Jo commented, "For equipment, we expect high growth as full-year results from major markets such as the United States, Thailand, and Brazil are reflected, and as sales begin in Europe in the second half, the number of units sold will increase. For consumables, robust growth in Shurink and the expanding contribution from Ballnewmer each year will enable high growth."

Classys's share price is currently down 22% from its annual high on May 12. Researcher Jo pointed out, "After the announcement of strong first-quarter results on May 12, short-term profit-taking occurred, and on May 16, a portion of the largest shareholder's stake was sold at a discount through a block deal, both of which negatively affected the share price. Currently, the stock is undervalued compared to the industry average, and it is time to focus on the highly visible fundamental improvements rather than on uncertain sale issues."