April 27, 2024

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[THE INVESTOR] Expectations for Handsome’s short-term earnings have weakened but the company might be able to rebound in the second half, said DB Financial Investment on Jan. 26, maintaining a “buy” recommendation and 44,000 won (US$41.31) target price. 

The apparel company has gained from rising demand for padded parkas, but this did not contribute much to its overall sales, and its earnings will be in line with market expectations at best, said analyst Park Hyeon-jin.

The slowdown in expanding its stores also dented its earnings growth, and there is a possibility that loss from valuation of inventory, which it has taken over when acquiring the fashion division of SK Networks, might increase, noted the analyst. 

In the second half, its prospects are better, as Handsome Global and Handsome GNF could return to normal and the reshuffle of domestic brands could show results, she said adding that profits from its Chinese operations will improve. 

Sales from online channels last year would have surged over 130 percent on-year and the company is responding to shifts in channels more actively, according to Park. 

By Hwang You-mee (glamazon@heraldcorp.com)