[Click e-Stock] SiliconTwo Sees Surging Demand... Growing Optimism for Earnings

NH Investment & Securities Raises Target Price for SiliconTwo

On August 25, NH Investment & Securities maintained its 'Buy' rating on SiliconTwo, raising its target price from 54,000 won to 58,000 won. The firm cited the company's efforts to establish a global distribution network and logistics infrastructure in the second half of this year, which is expected to significantly improve future earnings.

Jiyoon Jeong, an analyst at NH Investment & Securities, stated, "SiliconTwo's North American business posted the most notable growth rate in the company's overall performance in the second quarter," and predicted, "Expansion through national retailers will continue to drive growth in the second half of the year."

Jeong added, "The company is expanding its offline channels beyond iHerb to include Ulta, Target, CVS, and Nordstrom," noting that "discussions are also underway with Walmart, opening up the possibility of expanding into large-scale distribution networks in the medium to long term."

In addition, she commented, "By leveraging the network of CVC Capital, a private equity fund manager, SiliconTwo is preparing for direct supply and operational cooperation with major European retailers such as Douglas, which has annual sales of approximately 6 trillion won." She also assessed, "In addition to Boots, DM, and Rossmann, the company is directly communicating and supplying to key European retailers, which is a positive development for its business model."

She further explained, "In Latin America, operations began at the Mexico logistics center in June, and there has been a positive response from clients in Brazil and Paraguay." She added, "The company plans to establish a subsidiary in Brazil within the year and make further investments in local logistics and infrastructure."

Jeong analyzed, "The second half of this year is a phase of building a global distribution network and securing logistics infrastructure. Full-fledged earnings growth is expected to become visible in 2027." She added, "The current share price is trading at a price-earnings ratio (PER) of 10.7 times based on the expected earnings per share (EPS) for 2027, which means there is little valuation burden relative to growth."

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