Hansae

Hansae Co., founded in 1982, is Korea's largest apparel export ODM company, supplying its entire output to overseas buyers rather than selling domestically.

It partners with global brands including Gap, H&M, American Eagle, Muji, and Carhartt, and also manufactures private-label apparel for large retailers such as Walmart and Target.

Annual apparel export volume reaches roughly 400 million pieces, supported by a global production network spanning seven countries: Vietnam, Indonesia, Myanmar, Nicaragua, Guatemala, Haiti, and El Salvador.

Vietnam has traditionally accounted for more than 60% of total production, but that share has been shifting rapidly toward Central American sites such as Nicaragua and Guatemala following changes in US tariff policy.

Through its Color & Touch (C&T) subsidiary established in 2014, the company built a vertically integrated chain from fabric production to dyeing and sewing in Vietnam, and is now replicating that model with a large-scale investment in Guatemala.

In 2024 it acquired US textile firm Texollini to secure synthetic fabric technology, which it is using to expand its active-wear customer base including Patagonia and New Balance.

The company's shift from OEM to ODM, backed by growing design and R&D capabilities, is also cited as a point of differentiation versus peers.

On an annual basis, revenue fell from KRW 2,204.8bn in 2022 to KRW 1,708.8bn in 2023, then recovered to KRW 1,797.8bn in 2024 and KRW 1,941.8bn in 2025.

Operating profit, however, declined steadily from KRW 179.6bn in 2022 and KRW 168.2bn in 2023 to KRW 142.2bn in 2024 and KRW 83.4bn in 2025, with the operating margin peaking at 9.8% in 2023 before slipping to 7.9% in 2024 and 4.3% in 2025.

Net profit attributable to owners also nearly halved, from KRW 112.0bn in 2023 to KRW 58.0bn in 2024 and KRW 57.3bn in 2025.

Quarterly, 3Q25 posted a relatively solid KRW 543.4bn revenue and KRW 37.0bn operating profit, before profit compressed again in 4Q25 (KRW 456.1bn revenue, KRW 13.8bn operating profit) and 1Q26 (KRW 467.2bn revenue, KRW 10.5bn operating profit), with owners' net profit turning negative at roughly KRW -3.7bn.

In 2Q26, revenue rebounded to KRW 561.6bn, operating profit recovered to KRW 36.1bn, and net profit returned to a positive KRW 13.1bn.

This quarterly volatility appears to reflect a combination of product mix shifts (higher- versus lower-priced items), currency movements, and temporary costs tied to new production-site ramp-ups.

On cash flow, 2025 operating cash flow of KRW 85.4bn exceeded net profit of KRW 57.3bn, suggesting underlying cash generation has been maintained.

The global apparel ODM industry is heavily influenced by the inventory policies and consumer spending trends of large US brands and retailers. Recent commentary suggests buyers have been keeping inventories at minimal levels amid rising tariff costs and slowing consumption concerns.

Following US reciprocal tariff policy changes, tariff rates on major Asian production hubs including Vietnam (20% plus an additional 12.5%), Cambodia, and Bangladesh have risen, reshaping the industry's cost structure.

This has driven a broader industry shift toward Central American production sites with comparatively lower tariff rates, such as Nicaragua (18%) and Guatemala/El Salvador (10%).

Hansae, which established a Nicaragua production subsidiary as early as the 1990s and later expanded into Guatemala and Haiti, is seen by some observers as relatively well-positioned for this realignment.

Still, a substantial share of its production remains dependent on Vietnam, meaning it is not fully insulated from tariff variables.

Taiwanese and Chinese OEM/ODM competitors are pursuing similar diversification strategies, and the degree of vertical-integration completion and higher-priced product mix expansion is cited as a likely differentiator among peers over the medium term.

In its March 2026 value-up plan disclosure, the company outlined strengthening global ODM competitiveness, expanding vertical integration, and improving production-site efficiency as core directions, stating it would continue executing forward plans to expand Central American production sites such as Guatemala.

In Guatemala, a fabric dyeing plant and a spinning plant are set to begin full operation during 2026; once ramp-up stabilizes, this could support cost savings from in-house fabric sourcing and a higher mix of higher-priced synthetic-fiber products.

However, some analysis suggests initial ramp-up costs for the new facilities are being booked first, meaning cost pressure could persist through the second half of 2026.

Since an additional 12.5% tariff on Vietnamese-made goods took effect from July 24, 2026, how much of that cost is ultimately passed on between buyers and the manufacturer is likely to be a key variable for second-half margins.

On the dividend front, the company has set quantitative targets of a minimum KRW 600 per share and a payout ratio of at least 10% for FY26-28, and whether these are met going forward warrants monitoring.

By brand, revenue from higher-priced brands such as Gap, Aeropostale, and Carhartt is reportedly increasing while lower-priced mass-retailer volume declines, continuing a product-mix shift.