[E-Daily Reporter Shin Ha-yeon ] On the 15th, NH INVESTMENT & SECURITIES projected that Youngone Corporation(111770)would continue to post stable earnings despite the economic slowdown, driven by the robust growth of global outdoor and running brands such as Arc’teryx and On Holdings. The firm maintained its “Buy” investment rating and target price of 120,000 won.

Jeong Ji-yoon, an analyst at NH INVESTMENT & SECURITIES, said, “Second-quarter sales for domestic and international apparel OEM companies are showing signs of recovery compared to both the previous quarter and the same period last year,” adding, “The company is sustaining high-quality growth thanks to the strong performance of outdoor and running brands such as Arc’teryx and On.” He further explained, “Inventory assets, which will be recognized as revenue in the future, have also reached a record high, and the company is outperforming to the extent that it is largely unaffected by macroeconomic uncertainty and the state of the consumer goods sector.”

Youngone Corporation’s second-quarter consolidated revenue is expected to reach 1.1944 trillion won, a 15% increase year-over-year, while operating profit is projected to rise 28% to 185.8 billion won, in line with market consensus.

In the Original Equipment Manufacturer (OEM) segment, revenue in U.S. dollars is estimated to grow by 10%, driven by increased orders from major clients. Analyst Jeong stated, “Despite a high base from the previous year, dollar-denominated revenue is expected to grow by 10% due to increased orders from major clients,” adding, “End-of-period OEM inventory reached a record high of 817.6 billion won, up 21% year-over-year, indicating that robust revenue growth will continue.”

The company forecast that its subsidiary, SCOTT, will see improved profitability, even though the recovery in the premium bicycle market remains slow.

Researcher Jeong predicted, “Operating losses will narrow due to measures such as controlling discount sales,” adding, “As the proportion of new products sold at full price rises in the future, the gross profit margin will follow a gradual recovery trajectory.”

He went on to emphasize, “This is growth that overcomes uncertainty,” adding, “Amid continued high growth at Arc’teryx and expanding orders from On, the increase in OEM inventory assets is a factor that enhances visibility into future earnings.”