Despite the off-season, Youngone Corp., which realized an earning surprise in the first quarter of this year, saw its share prices surge. Securities companies have revised Youngone Corp.’s share price targets upward as a result.
Business circles said Youngone Corp. announced Q1 business performance beyond market consensus.
Even though the garment OEM industry was in a sagging state due to a declining annual won-dollar exchange rate and slumping global consumption, the company achieved its best-ever business performance.
Youngone posted 167.2 billion won in Q1 operating profit on a consolidated basis.
The figure represented a 14.6 percent surge year-on-year. The company chalked up 840.6 billion won in Q1 sales, a 9.7 percent rise year-on-on. Youngone saw its Q1 net profit jump 27 percent year-on-year to 141.7 billion won.
Youngone’s business performance was outstanding, compared to its Korean counterpart OEM companies. Hansae saw Q1 operating profit plunge 26.7 percent year-on-year to 35.9 billion and sales drop 29.3 percent year-on-year to 410.8 billion won.
Shinwon also saw Q1 operation profit decline 27.2 percent year-on-year to 8.5 billion won and sales nose-dive 27.6 percent year-on-year to 195.9 billion won.
The declines were attributable to the fact that cooperative firms of the OEM companies saw winning orders decline due to the slumping U.S. consumer market.
Youngone’s good business performance was based on the back of rising orders, coupled with rising popularity of major customer companies’ products.
Youngone, receiving orders from about 40 global brands, produces items, such as garments, shoes and backpacks in factories of countries, such as Bangladesh, Vietnam, El Salvador, and Ethiopia in an OEM format and export them.
In a recent analysis report, issued on May 16, NH Investment and Securities maintained “buy” position toward Youngone Corp. and readjusted upward its share price target to 67,000 won.
The upward readjustment was owed to the fact that Youngone Corp. saw Q1 operating profit margin in the OEM sector rise to 27.8 percent, an equivalent to that in the high season and an expectation that the company is forecast to maintain performance momentum based on good winning order trends in the second quarter.
Chung Ji-yoon, an analyst with NH Investment and Securities, said, “Despite controversies over continuous peak-out and business de-stocking, Youngone Corp. achieved the best-ever sales and operating profit in the OEM sector in the first quarter of this year, and the company has maintained and will maintain the business performance momentum, and it cannot be better.”
A view of Youngone headquarters in Malli-dong, Jung-gu, Seoul.
Youngone, an Iconic Pioneer in Global Outdoor Apparel, Footwear and Gear
Youngone founder and Chairman Sung Ki-hak is Korea’s representative figure in the outdoor industry.
Sung has been with the industry for nearly half a century. In 1997, he introduced the U.S. outdoor brand “The Northface” through his subsidiary company Goldwin Korea, grabbing an opportunity to catapult Youngone into the nation’s top outdoor company.
Youngone Corp. dates back to Chairman Sung’s establishment of an apparel production, import and sales company in 1974 at age of 27, at the request of a foreign buyer.
Youngone has continued to produce OEM products as a sports and outdoor company.
Youngone’s long-time clients include globally recognized brands, such as Patagonia, Adidas, Lululemon on top of The Northface.
Thanks to the expertise the company has accumulated, Youngone is on a roll in the global outdoor apparel and footwear industry.
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