Lotte Food Halved in One Year... Bleak Outlook This Year Too

[Asia Economy Reporter Koh Hyung-kwang] The stock price of Lotte Food, a comprehensive food company, has halved over the past year. Experts analyze that Lotte Food, which is stuck in a slump of poor performance, lacks the momentum to boost its stock price in the short term.

According to the Korea Exchange on the 10th, Lotte Food closed at 399,000 KRW on the previous day in the KOSPI market. Compared to the stock price of 745,000 KRW on January 8th last year, it has dropped by 46%.

It is the first time in about 8 years since February 13, 2012 (398,000 KRW) that the closing price has fallen below the 400,000 KRW mark. In September 2015, it soared to the 1.18 million KRW range but has been on a downward trend since then. The stock price has shrunk to about one-third of its level in just over four years. Over the past year, foreign and institutional investors have net sold Lotte Food stocks by 20.5 billion KRW and 7 billion KRW respectively, accelerating the stock price decline.

Lotte Food is a comprehensive food company that changed its name after Lotte Samkang merged Lotte Ham and Pasteur Milk in 2013, and had maintained stable performance until 2017. However, since 2018, the growth of the food processing industry has slowed, causing performance to stagnate, and it worsened further last year.

It is also analyzed that the spin-off and absorption merger of the investment business divisions of Lotte Food, Lotte Chilsung Beverage, and Lotte Shopping into Lotte Holdings (formerly Lotte Confectionery) in the second half of 2017 negatively affected the stock price.

Securities firms have recently been lowering their target prices for Lotte Food. Hana Financial Investment lowered Lotte Food’s target price by 29.3% from 750,000 KRW to 530,000 KRW on the 3rd. Earlier, IBK Investment & Securities also lowered the target price from 800,000 KRW to 650,000 KRW, an 18.7% cut, citing continued poor performance.

Experts pointed out that expectations for Lotte Food’s performance should be lowered for the time being. Sim Eun-joo, a researcher at Hana Financial Investment, said, "Due to last year’s poor performance, the stock price has fallen to the lower end of its historical valuation range," adding, "While a base effect can be expected in this year’s performance, a long-term approach is necessary due to the absence of short-term stock price momentum."

This content was produced with the assistance of AI translation services.