[E-Daily Reporter KIM YOON-JEONG ] HANWHA INVESTMENT & SECURITIES projected that COWAY(021240)will continue its robust growth momentum, driven by high growth in Malaysia and Thailand, as its net increase in rental accounts reached a record high in the second quarter. The firm maintained its “Buy” investment rating and target price of 150,000 won.

On the 15th, Lee Jin-hyup, an analyst at HANWHA INVESTMENT & SECURITIES, stated, “We estimate that COWAY will post second-quarter revenue of 1.4221 trillion won and operating profit of 262.3 billion won, in line with market expectations.” This represents year-over-year increases of 13% and 8%, respectively.
Revenue for the domestic standalone subsidiary is estimated at 946.5 billion won, an 8% increase year-over-year, while operating profit is projected to rise 11% to 172.7 billion won. Despite a decline in accounts reaching the end of their lease terms, rental sales volume is expected to hold steady at last year’s level, resulting in a net increase of 200,000 rental accounts—a 27% rise compared to the same period last year.
The analyst explained, “Exceeding 200,000 in net quarterly account growth is a record-breaking achievement,” adding, “While sales volume has a significant impact on revenue growth due to lease accounting, cash flow depends on net account growth and the total number of accounts.”
He continued, “While there were concerns that the decline in accounts maturing for ownership transfer would lead to higher customer acquisition costs, there appear to be no unusual issues regarding profitability this quarter, just as in the first quarter.”
He also projected that the growth momentum of overseas subsidiaries would continue. He estimated that sales in Malaysia would reach 433.7 billion won, a 22% increase year-over-year, with operating profit rising 23% to 83.4 billion won.
The analyst stated, “In addition to strong performance in the existing water purifier category, new categories such as mattresses and air conditioners have taken root, leading us to believe the company is entering a second phase of growth following its initial market entry.” In Thailand, the company is expected to record 35% year-over-year revenue growth, with a net increase of 30,000 to 40,000 accounts for the quarter.
The analyst noted, “The fact that rental sales volume is holding steady at last year’s level—despite a decrease in the number of accounts reaching the ownership phase and without an increase in customer acquisition costs—demonstrates the company’s differentiated competitive advantage.”
He continued, “Although domestic growth is slowing amid an environment where rental sales growth is challenging, the company is maintaining its overall growth rate as Malaysia and Thailand continue to grow at rates in the 20% range and 30–40% range, respectively.”
From a supply-and-demand perspective, the analyst viewed the share buyback by major shareholder Netmarble Corporation positively. Following a recent share buyback worth 40 billion won, Netmarble Corporation announced an additional purchase of 50 billion won worth of shares. This is part of a plan to purchase a total of 150 billion won worth of shares on the open market over the course of one year.