[Click eStock] "Hansae Expected to See Weak Q3 Earnings... Target Price Lowered"

Target Price Lowered from 15,000 Won to 11,000 Won

On August 26, Shinhan Investment & Securities announced that it has inevitably lowered its target price for Hansae Co., Ltd. from 15,000 won to 11,000 won, citing an unavoidable decline in operating profit for the third quarter of this year. The investment opinion of 'Trading Buy' was maintained.

Park Hyunjin, a researcher at Shinhan Investment & Securities, stated, "We have lowered the target price due to downward revisions in projected earnings for 2025 and 2026. Although quarterly sales are showing a growth trend compared to the same period last year, profit remains sluggish. The increase in orders from buyers with higher average order prices, such as Aeropostale-affiliated brands and Carhartt, is a positive sign. However, the widening gap between the dollar exchange rate at the time of raw material purchases and the exchange rate recognized at the time of sales is exacerbating the decline in profits." Park added, "The stock price is likely to continue to bottom out for the time being."

There are expectations that the profit downturn in the third quarter will be resolved in the fourth quarter. Park explained, "The gap between the average won-dollar exchange rate at the time of raw material purchases in the first quarter (1,452 won) and the exchange rate recognized at the time of sales is continuing to widen in the third quarter as well (Hansae's third-quarter average exchange rate is expected to be 1,380 won). Therefore, a decline in third-quarter operating profit appears inevitable."

Shinhan Investment & Securities projects that Hansae's consolidated sales in the third quarter will decrease by 6% year-on-year, while operating profit will drop by 44%. Park predicted, "The burden of raw material costs will be resolved in the fourth quarter."

However, there is an opinion that the recovery of fourth-quarter performance depends on the U.S. consumer market. Park noted, "Although the company has mentioned a recovery in fourth-quarter performance, the key is whether the U.S. consumer market maintains its current state. The problem is that it is difficult to have strong confidence in the U.S. consumer market due to tariff inflation."