[비즈한국] Although Hanssem009240 has improved its profitability over the past few years, voices of concern remain. This is because revenue is on a downward trend, and demand for home interiors is lackluster due to the slump in the real estate market. Reflecting these concerns, Hanssem’s stock, which once hit 69,000 won last year, is currently lingering in the 40,000 won range. The largest shareholder of Hanssem is the private equity firm IMM Private Equity (IMM). If Hanssem fails to recover its stock price, it will be difficult for IMM to recoup its investment. Hanssem maintains that it will improve performance through measures such as management efficiency. The interior design industry is keeping a close watch on whether Hanssem's strategy will work in the market.
IMM acquired Hanssem in 2022. At the time, some in the business world expressed concerns, as Hanssem’s profitability was poor, including an operating loss of 21.7 billion won in 2022. The fact that IMM, a private equity firm, lacked expertise in the interior design business was also cited as a factor for concern. In a similar case, Homeplus has remained in the red ever since it was acquired by the private equity firm MBK Partners (MBK).
However, the situations of Homeplus and Hanssem are different. Hanssem succeeded in turning a profit, recording operating profits of 1.9 billion won and 31.2 billion won in 2023 and 2024, respectively. Hanssem also recorded an operating profit of 8.7 billion won in the first half of this year. Hanssem has now recorded a profit for nine consecutive quarters since the second quarter of 2023.
Nevertheless, the securities industry does not view Hanssem's outlook positively. Although the company continues to be profitable, the scale of that profit has decreased significantly compared to last year. There are concerns that there may be a limit to revenue growth because the size of the company has shrunk compared to the past. The fact that the remodeling market is not what it used to be due to the recent downturn in the real estate market is also a negative factor.
In fact, while Hanssem has succeeded in turning a profit, its revenue is on the decline. Hanssem's revenue decreased from 2.0009 trillion won in 2022 to 1.9669 trillion won in 2023, and further to 1.9084 trillion won in 2024. Hanssem's revenue for the first half of this year was 902.9 billion won, a 6.33% decrease compared to 963.9 billion won in the same period last year. This appears to be influenced by the shrinking size of the company. The number of Hanssem Rehaus agencies, which exceeded 900 in early 2022, has now decreased to about 620.
Kim Seon-mi, a researcher at Shinhan Securities, analyzed, “While strategies such as cost optimization and increasing the proportion of mid-to-high-end products are yielding results, it is difficult to offset the cost burden caused by the shrinking size of the business. The decline in new move-ins and sluggish housing transactions have led to a reduction in home furnishing sales, and the rise in fixed costs due to the smaller scale has led to poor performance.”
A high-dividend policy is also cited as a factor that makes Hanssem’s outlook unstable. Hanssem paid out 74.7 billion won and 141.6 billion won in dividends in 2023 and 2024, respectively. Hanssem’s dividend payout ratio in 2024 reached 93.7%. Considering the interest on the funds mobilized for the acquisition, it is not easy for IMM to lower Hanssem's dividend payments.
For Hanssem, improving performance is the way to dispel these concerns. While announcing its first-half results this year, Hanssem stated, “We will continue to achieve solid growth in the second half by implementing investment strategies to expand our market share in the home interior industry and maintaining a stance of management efficiency.”
Some view the "management efficiency" mentioned by Hanssem as implying asset sales and adjustments to the business portfolio. In fact, Hanssem’s affiliate, Hanssem Development, has recently been adjusting its business by incorporating its AS division into the Hanssem headquarters and deciding to sell its building management division. Hanssem has stated several times that there have been no artificial workforce restructuring efforts. Nevertheless, there is an atmosphere in the business world that does not rule out the possibility of Hanssem carrying out workforce restructuring if a decline in profitability becomes a reality.
Regarding the possibility of workforce restructuring, a Hanssem official stated, “We are solidifying our talent base for sustainable growth by placing talented internal personnel in the right positions,” adding, “We are not artificially reducing staff.”
Generally, a company's stock price reflects not only immediate performance but also future potential. Hanssem’s current stock price remains in the 40,000 won range per share. IMM acquired Hanssem at 221,000 won per share. Even considering the management premium, it is realistically not easy for IMM to recoup its investment in Hanssem in the current climate. For IMM, it appears that it will be able to raise the stock price and recoup its investment only by demonstrating Hanssem’s future potential.
The area where Hanssem has recently been focusing its investments is the kitchen-related business. Hanssem is expanding its investments by recently launching new products and rebranding its premium kitchen brand, 'Kitchenbach'. Since the beginning of August, Hanssem has been conducting a 'Euro Kitchen' campaign alongside the launch of two new series. The company plans to strengthen its market dominance across its entire kitchen portfolio and drive revenue growth centered on high-priced products. In addition, Hanssem opened an offline store, 'Flagship Nonhyeon,' in June, and plans to reopen 'Flagship Busan Centum' in October.
A Hanssem official said, “In the second half of the year, we will continue integrated marketing to secure new customers and improve brand preference, such as our large-scale 'Sam Festa' event to commemorate our 55th anniversary,” adding, “We plan to continue solid growth befitting the number one home interior company by securing new growth engines and driving revenue.”