[Click e-Stock] "Hansae Needs Conservative Approach Amid Rising Costs... Target Price Cut"

On the 29th, DB Financial Investment reported that while Hansae Co., Ltd. is experiencing limited revenue growth, cost pressures are increasing. Accordingly, the target price was revised downward from 18,000 won to 12,000 won. The investment opinion was maintained as 'Buy.'

Jena Heo, researcher at DB Financial Investment, stated, "We have lowered our profit estimates and target multiples, resulting in a reduced target price." She added, "Advance costs for the Guatemala plant, which is scheduled to begin operation in 2027, will be reflected in 2026, and companywide expenses are expected to increase further in the second half of the year. Therefore, only if revenue growth precedes, the stock price will be able to form a bottom with expectations for meaningful earnings improvement." She continued, "Considering the gap from the target price, we maintain our investment recommendation; however, we advise a conservative approach to the stock."

Hansae Co., Ltd.'s earnings for the second quarter of this year are expected to fall short of expectations. Researcher Heo said, "On a consolidated basis, second-quarter revenue is expected to be 536.3 billion won, up 12.9% year-on-year, and operating profit is projected at 16.2 billion won, up 31.1%. However, this will come in below market expectations of 18.4 billion won." She analyzed, "Despite favorable foreign exchange rates, order volumes did not increase significantly, and increased administrative costs related to the 2027 Guatemala project are the main causes of weak profitability."

While revenue growth remains limited, cost pressures are rising. Heo pointed out, "Apparel manufacturing is a capital-intensive industry, where high fixed-cost burdens mean that increasing production efficiency through higher volumes is the most important factor." She noted, "Hansae Co., Ltd.'s buyers shifted the increased tariff burden to manufacturers starting last year, and concerns over slowing consumption due to inflation have further led them to keep inventory levels to a bare minimum."

This content was produced with the assistance of AI translation services.