[Edaily Reporter Hyera Lee ] On the 26th, NH INVESTMENT & SECURITIES HANSAE(105630)lowered its target price for Hanse Industries from the previous level (14,000 won) to 11,500 won, reflecting the recent neglect of the apparel sector and the concentration of supply and demand on leading stocks.

Jeong Ji-yoon, an analyst at NH INVESTMENT & SECURITIES, stated, “While the company has shifted to order growth starting in the second quarter, the rising won-dollar exchange rate and strong order growth at its subsidiary, Color & Touch, are expected to drive earnings improvement,” but added, “We are lowering the target price to reflect recent market trends.”
NH INVESTMENT & SECURITIES estimated HANSAE’s second-quarter consolidated revenue at 561.3 billion won and operating profit at 19.2 billion won. This represents year-over-year increases of 18% and 56%, respectively, with operating profit expected to exceed market estimates by 15%.
The company projected that revenue from its original equipment manufacturing (OEM) business would grow by 5% year-over-year. While orders from GAP and large supermarket buyers are expected to remain at last year’s levels, orders from high-margin clients such as Carhartt and Aeropostale are projected to show mid-to-high single-digit growth. Analyst Jeong predicted, “Thanks to the effect of an average exchange rate that is approximately 7% higher than last year, the cost of sales ratio will remain similar to the first quarter or improve slightly.”
He identified the subsidiary Color & Touch as a key driver of earnings growth. Analyst Jeong explained, “Color & Touch’s second-quarter revenue is expected to reach 949억 won, a 58% increase year-over-year, driving company-wide revenue growth,” adding, “Thanks to the peak season effect and the expansion of external business partners, the utilization rate at Plant No. 3 is also continuing to rise.”
He continued, “While quarterly earnings have been highly volatile due to the nature of the business, which relies on orders from overseas clients, the stock price has already largely priced in this uncertainty.”
However, he predicted that the second half of the year would reflect the start-up costs of the new production subsidiary in Guatemala and the losses of the U.S. manufacturing subsidiary, Texoliny. Analyst Jeong noted that recent market sentiment should also be factored into the investment recommendation.
Analyst Jeong assessed, “Given the outlook for improved second-quarter earnings and a dividend yield of 7.5% based on the current stock price, the investment appeal remains valid.”