[Edaily Reporter Hyera Lee ] On the 10th, Hana Securities assessed that SILICON 2 Co.,Ltd.(257720)is drawing attention for its growth momentum in overseas markets, while its appeal as an undervalued stock is also coming to the fore.

Park Jong-dae, an analyst at Hana Securities, stated in a report released that day, “Given the company’s strong medium- to long-term growth potential, buying on dips is a sound strategy.”
Hana Securities estimated SILICON 2 Co.,Ltd.’s second-quarter consolidated revenue at 386.2 billion won and operating profit at 71.4 billion won. This represents year-over-year increases of 46% and 37%, respectively.
The firm expects performance in Europe and North America to drive this growth. Analyst Park predicted, “Revenue in Europe is expected to rise 65% year-over-year, while revenue in North America is projected to increase by 54%.” He explained, “In North America, demand for inventory buildup ahead of iHerb’s peak season and expanded orders from major retailers such as Ulta Beauty, Target, and Walmart will have a positive impact,” adding, “In Europe, as news of the success with Boots spreads, inquiries from major retailers—particularly in the UK, Germany, Spain, Poland, and France—regarding store placements are increasing.” He noted in particular that France has been growing by approximately 20% each quarter since the company’s entry in the fourth quarter of last year.
In the Middle East, demand—which had been dampened by the war—is recovering, while in Central and South America, sales through local subsidiary logistics centers have been generating revenue in earnest since June, according to the analysis. Analyst Park predicted, “However, due to the impact of logistics center construction, workforce expansion, and increased marketing investments, the operating profit margin for the second quarter is expected to fall to 18.5%, a 1.2 percentage point decline from the same period last year.”
He forecast that growth momentum would accelerate further in the second half of the year. Analyst Park said, “The year-over-year sales growth rate in Europe for the third quarter could exceed 90%,” adding, “Expanded sales with major retailers such as Boots, Lookfantastic, and Rossmann are enhancing earnings visibility.” He continued, “To meet high demand, the company is establishing a logistics center in the UK, and in North America, demand for inventory to prepare for large-scale year-end sales events is set to intensify.”
In particular, he forecast, “The benefits of establishing the Mexican subsidiary will become fully evident in the third quarter,” adding, “The peak season effect will grow progressively stronger—from the first quarter to the second, and from the second to the third.”
He also emphasized the stock’s attractive valuation. Analyst Park noted, “The current 12-month forward price-to-earnings ratio (P/E) is only 8.2 times,” and assessed that “the decline in operating profit margin is merely a result of increased investment and does not indicate any issues with the company’s business competitiveness.” He added, “As Korea’s largest cosmetics trading vendor, the company is leading the expansion of K-Beauty into Europe, and given the significant global growth potential in regions such as Latin America, the Middle East, and the CIS, a buy-on-dip strategy is effective.”