[EQUITIES] ‘Cuckoo Electronics to benefit under new government’
[THE INVESTOR] Cuckoo will recover as the business environment improves following the launch of the new administration, said Kiwoom Securities on May 19, maintaining a “buy” recommendation and 210,000 won (US$186.30) target price.
It has suffered significant losses from political issues such as THAAD row and closing of Kaeseong Industrial Complex, but the new government’s political and diplomatic policies could improve the situation while stimulated domestic consumption could lead to recovery in demand for its electronic rice cookers, said analyst Kim Ji-san.
Although sales of home appliances in the first quarter fell 11 percent on-year, and business from China was down by 39 percent, its rental business has maintained double-digit growth rate and profits. The Malaysian operations have also started posting profits, noted the analyst.
Its revenue and operating profit will take an upturn from the second quarter on the back of rollout of a new rice cooker equipped with IoT technology and strong exports to the US and Vietnam, said Kim.
By Hwang You-mee (firstname.lastname@example.org)