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Earnings resilience continues; shareholder returns strengthened further

2Q26 preview: In-line results likely

For 2Q26, we expect Hanssem to report consolidated revenue of W427bn (-7.1% YoY) and operating profit of W11.8bn (+423.8% YoY; in line with the consensus of W12.2bn). Housing transaction activity remained healthy ahead of the May 9 expiry of the temporary suspension of higher capital gains taxes for owners of multiple homes. This, together with peak-season effects and a continued contribution from the Ssem Festa promotion held in March, likely supported another quarter of double-digit YoY growth in Rehaus (B2C) revenue. By contrast, B2B revenue likely remained on a downward trend, reflecting the lagged impact of weak housing presales. Following the merger with subsidiary Hanssem Nexus (effective Jul. 31), Hanssem Nexus’s results are expected to be reflected in the standalone B2B segment beginning in 3Q26.

Multi-pronged strategy for driving top-line growth

We expect Hanssem’s growth strategy to remain focused on expanding sales of partial renovation packages centered on core product categories (e.g., kitchens and bathrooms), increasing average order values, and launching new products. The continued rollout of mid/high-end products since 2H24 has also contributed to the recovery in B2C revenue. Building on its accumulated experience with kitchen-and-bathroom package offerings, we expect the company to expand sales of partial renovation packages, which should increase installation-related revenue and support a recovery in margins. While the government''s proposed tax reforms, if implemented, would create a less favorable environment for the B2C business, we believe the firm’s growth initiatives will allow it to maintain earnings at current levels.

Upgrade to Buy and raise TP to W48,000; treasury share retirement remains key

We raise our target price on Hanssem by 7% to W48,000 (from W45,000), reflecting revisions to our earnings forecasts and valuation base. With our revised target price implying 24.0% upside, we upgrade our rating to Buy from Hold. On Jun. 9, Hanssem announced a medium/long-term shareholder return policy targeting a payout of at least 50% of annual adjusted standalone net profit, along with a W50bn share buyback (Jun. 10?Dec. 9, 2026). Considering the quarterly DPS of W1,500 announced on Jul. 1, equivalent to a total payout of approximately W24.6bn, we expect the firm’s 2026 shareholder return ratio to significantly exceed its stated target of 50%. Based on the current share price, the W50bn buyback should raise the treasury share ratio to 35.0% from 29.5%. Under the third amendment to the Commercial Act, the deadline for retiring existing treasury shares is Sep. 2027; from a share price perspective, the key variable remains whether the retirement materializes and the extent to which related expectations are priced into the stock.