Handsome (020000.KS) extended its gains on the 21st after unveiling a shareholder return plan to buy back and cancel 30 billion won ($21.6 million) worth of its own shares over three years. Analysts welcomed the boost to per-share value from the cancellation, and expectations of a third-quarter earnings recovery added to the buying, market watchers said.
Handsome traded at 18,390 won as of 2:29 p.m. on the 21st, up 830 won, or 4.73%, from the previous session, according to the Korea Exchange. The stock rose as high as 18,700 won during the session, a gain of 6.49%.
The main driver was the expanded shareholder return program. Handsome plans to buy back 10 billion won of its shares each year from 2026 through 2028, for a total of 30 billion won, and cancel all of them. This year, it will spend 10 billion won from the 21st through Oct. 22 to acquire 629,327 shares and cancel them on Nov. 6. That is about 2.9% of its outstanding shares. The company also raised its dividend payout base from 15% of operating profit on a standalone basis to more than 20%, and lifted the minimum dividend per share to 800 won from 750 won.
The earnings outlook is also supporting the stock. NH Investment & Securities forecast third-quarter revenue of 332.3 billion won, up 7.3% from a year earlier, and operating profit of 10 billion won, up 302.8%. It said September sales returned to double-digit growth as the fall and winter season got underway, with full-price sales of flagship brands such as Time and Mine performing strongly.
Heungkuk Securities estimated third-quarter operating profit at 10.4 billion won and raised its target price to 28,000 won on the 21st. The brokerage said an earnings turnaround and the higher per-share value from the share cancellation could help resolve the stock's chronic undervaluation. Handsome trades at about 4.5 times 12-month forward earnings and 0.2 times book value, according to the brokerage.
Some analysts said the buyback itself could improve supply-demand conditions for the time being. The daily limit on buyback orders this year is 62,932 shares, a sizable amount compared with average daily trading volume of about 100,000 shares over the past 60 days. "Considering that average daily trading volume over the past 60 days is around 100,000 shares, the share price is likely to remain positive for some time even from a supply-demand perspective," said Yoo Jung-hyun, an analyst at Daishin Securities.
