[Click e-Stock] "Handsome, Target Price Raised to 30,000 Won... Profit Leverage Begins"

On the 26th, NH Investment & Securities raised its target price for Handsome to 30,000 won, reflecting meaningful sales growth and profit recovery, while maintaining its investment rating of "Buy."

In a report released that day, Jeong Jiyoon, an analyst at NH Investment & Securities, stated, "We are raising our operating profit estimate by 22%, reflecting the recent wealth effect, a sales recovery driven by the rebound cycle in semi-durable goods consumption, an increased proportion of full-price sales for core brands, and improved inventory soundness that lifts the gross margin," adding, "The current share price is undervalued, and considering that the company is at the beginning of a full-fledged earnings upcycle, we recommend buying on dips."

In the fourth quarter of last year, Handsome posted consolidated revenue of 463.7 billion won, up 6%, and operating profit of 27.2 billion won, up 30%. The company completed discounted sales of older inventories starting from the fourth quarter, and it is expected that the annual gross margin will increase due to higher sales of mid- to high-priced in-house brands.

Jeong said, "This month, existing-store sales at domestic department stores are likely to continue growing at a double-digit rate," adding, "Since department store channels account for around 60% of Handsome's sales, the company is well positioned to benefit from the rebound in domestic consumption."