Green Cross edged higher as securities firms projected that even if its third-quarter sales decline this year, operating profit will increase significantly. While revenue is expected to fall short of market expectations, operating profit is forecast to beat the consensus, making profitability improvement stand out.

As of the morning of the 22nd, Green Cross (006280) is trading at 131,900 won, up 500 won (0.38%) from the previous trading day. As the stock moves in slightly positive territory, Mirae Asset Securities focused on the potential increase in Green Cross's third-quarter operating profit and improvement in operating margin.

■ Q3 Sales Forecast -15.2%, Operating Profit +39.7%

Mirae Asset Securities projected Green Cross's consolidated revenue for the third quarter of 2026 at 516.6 billion won, down 15.2% from the same period last year. In contrast, operating profit is expected to reach 40.8 billion won, up 39.7% year-on-year. With both declining sales and rising operating profit expected simultaneously, profitability improvement rather than top-line growth emerges as the key factor in evaluating earnings.

The projected third-quarter operating margin is 7.9%, up 3.1 percentage points from the same period last year. Even with declining sales, the operating margin is expected to improve, with profit growth estimated to reach double digits.

■ Sales Below Consensus, Operating Profit Above

Compared with market consensus, sales and operating profit point in opposite directions. The third-quarter revenue consensus is 569.4 billion won, 52.8 billion won higher than Mirae Asset Securities' estimate of 516.6 billion won. The brokerage's forecast is about 9.3% below market expectations.

However, its operating profit forecast exceeds the market consensus. While the market expects third-quarter operating profit of 36.4 billion won, Mirae Asset Securities presented 40.8 billion won, 4.4 billion won higher. This is about 12.1% above consensus. As projections suggest operating profit could surpass market expectations even if sales underperform, not only revenue size but also margin changes are emerging as important variables in evaluating Green Cross's earnings.

■ Annual Results Also Expected to Show 'Declining Sales, Rising Profit' Structure

A similar trend is expected in annual results. Mirae Asset Securities forecast Green Cross's consolidated revenue for 2026 at 1.8694 trillion won, down 6.1% year-on-year. In contrast, annual operating profit is expected to reach 76.5 billion won, up 10.7% from last year.

Based on these projections, Mirae Asset Securities maintained its 'Buy' investment opinion and target price of 180,000 won for Green Cross. The target price of 180,000 won is 48,100 won higher than the current stock price of 131,900 won, implying upside of about 36.5% on a simple calculation. However, the target price reflects the brokerage's valuation of the company and does not guarantee an actual stock price increase.

■ Key Points to Watch

Going forward, the main points of interest in Green Cross's earnings are whether third-quarter operating profit can exceed market expectations and whether the 7.9% operating margin can be achieved. Whether the company can sustain operating profit growth despite the projected annual revenue decline is expected to influence medium- to long-term earnings evaluation. As profitability improvement is expected to continue despite shrinking scale, attention is focused on whether the diverging trend of sales and profit will actually be confirmed in the third-quarter earnings release.

[This article is intended to provide information for investment reference and does not recommend buying or selling specific stocks. Figures may vary depending on market conditions. Investment decisions and their consequences are the responsibility of the investor. AI provided partial assistance.]