Buy: YoungoneThe share price of Korean trading company Youngone is going to move up further as its subsidiaries are making larger profits, says Korea Investment & Securities.
Youngone has a 51-percent controlling stake of Goldwin Korea, which is the maker of the North Face, the nation’s No. 1 outdoor apparel brand. Goldwin’s revenue grew 20 percent in the first quarter from the previous one.
Korea Investment says that the market for outdoor sportswear such as the North Face have grown up to take up the second largest portion in clothing sales at major department stores, only next to the luxury fashion category.
Goldwin currently has the license to sell Aigle, a French outdoor brand. Aigle had 52 stores in 2010 but this year it opened 9 more. Korea Investment says that the number will reach 81 at the end of this year.
The brokerage house also claims that the operating profit for this year will jump 11 percent year-on-year to 119.6 billion won ($101 million) due to the boost in Aigle’s sales.
Another good sign for Youngone is that its import business is set to recover from a downturn, which started at the beginning of last year when the Korean currency depreciated sharply.
Korea Investment adds that the economic recovery in the developed countries will bring more orders on its export items.
Buy: Sungwoo HitechSungwoo Hitech, an automobile components manufacturer, is expected to see sales increase in Europe, says Woori Investment & Securities. The manufacturer’s factory in the Czech Republic is expanding to keep up with increasing orders for car components, led by strong sales of two Korean carmakers Hyundai Motor and KIA motors in the region.
Hyundai’s launch of new models there will further boost Sungwoo’s sales this year, says Woori.
The company is currently operating two factories in Eastern Europe: the other being in Slovakia.
Woori adds that Sungwoo is likely to benefit the most from the Korea-EU free trade, which is to come into effect this July, since it is the most active among Korean car component makers in Europe.
In the first quarter, it saw an increase of 16.5 percent in sales ($180 million) and 22.5 percent ($5.2 million) in its operating profit compared to the same period of last year.
Sell: NCsoftWoori Investment & Securities says that it does not recommend online game developer NCsoft anymore, as the recent fall in its stock price may prompt investors to cash out further.
In the first quarter, NCsoft’s sales and operating profit dropped 7 and 40 percent respectively compared to the same period of last year. Its sales were 155.3 billion won ($143 million) with an operating profit of 46.1 billion won ($42.5 million).
After the announcement of the financial performance last Tuesday, NCsoft’s shares fell more than 5 percent.
Opinions differed as some brokerage houses such as Daewoo and Eugene held on to their position that NCsoft is still a good buy, since it is finally ready to release new titles such as “Blade and Soul.”But JP Morgan is less impressed.
JP Morgan explained that there are some negative factors in NCsoft, such as the delay of the Blade and Soul project.
The U.S. investment bank changed its position of NCsoft from “buy” to “neutral” and lowered the target stock price to 280,000 won from 300,000 won. Friday’s closing price was 256,000 won.
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