LS Securities said on the 9th that it expects new product expansion and an active shareholder return policy for Coway. It maintained a target price of 110,000 won and a "buy" rating. Coway's closing price in the previous trading day was 78,200 won.
In the fourth quarter of last year, Coway's consolidation-based revenue rose 13.3% on-year to 1.2754 trillion won, while operating profit fell 1.0% to 181.6 billion won. Domestic business revenue grew 11% for the year, marking a record high.
Orin-ah, an analyst at LS Securities, said, "Growth in rental accounts and strong sales of VIREX led to solid top-line growth." In particular, for the Indonesia subsidiary, fourth-quarter revenue last year increased 40% from a year earlier, and even excluding a one-off 1.7 billion won bad-debt recovery, it posted an operating profit, raising growth expectations.
Coway disclosed guidance for this year of 6.3%–9.8% revenue growth and 4.7%–8.7% operating profit growth from last year. Analyst Oh said, "Along with the stable revenue structure of existing accounts, there are growth expectations from new products and category expansion," adding, "In particular, VIREX is expected to see sales expansion based on new products such as beds built on innovative technology." For overseas business, growth is expected to stand out in new markets such as Indonesia and Thailand, in addition to Malaysia.
Oh added, "Based on expected results for this year, the current share price trades at a price-earnings ratio (P/E) of 8.5, and securing the next growth driver after Malaysia, along with a stable domestic business, is encouraging," and "the active shareholder return policy is also attractive."