DB Financial Investment forecasts that Youngone, a specialist in outdoor products, will show significant growth. It raised the target stock price from the previous 57,000 won to 53,000 won and gave an investment opinion of 'buy.' On the previous trading day, 6th, Youngone's closing price was 46,600 won.
On the 7th, Je-na Heo, a researcher at DB Financial Investment, said, "We raise our target price due to the upward adjustment of earnings estimates for Youngone," adding that "despite the recent steady rise in Youngone's stock price, it only reflects a projected price-to-earnings ratio (PER) of 5 times this year."
The ongoing strong dollar environment, coupled with the acceleration of the original equipment manufacturer (OEM) turnaround (performance improvement) and the phase of overcoming the sluggishness of Scott (a premium bicycle brand owned by Youngone), also increases the investment appeal for Youngone. In the fourth quarter of last year, Youngone's consolidated revenue was 846.9 billion won, and the operating loss was 13.6 billion won. Revenue exceeded DB Financial Investment's estimates, but operating profit significantly fell short.
Although the performance at the end of last year was not good, based on the trends of major buyers, Je-na Heo's assessment is that Youngone is a safe alternative in the current market situation. He explained, "The growth of Youngone's major top buyers, such as The North Face, Patagonia, Lululemon, and Arc'teryx, continues, leading to a strong influx of orders to Youngone, the main vendor."
Youngone produces products primarily focused on heavy outerwear and woven fabrics, so the pressure for price reductions from customers is not as strong compared to other companies. Research Institute Heo noted, "Since orders have recovered since the second half of last year, Youngone's OEM division is expected to see steady growth in dollar orders this year," adding that "Scott will reduce inventory, and losses are expected to decrease significantly compared to the previous year."