HiteJinro's Stock Price Continues to Rise This Year 'Jjuk Jjuk Jjuk'

52-Week High Reached Again in One Day... Securities Firms' 'Top Sector Favorite Stocks'

[Asia Economy Reporter Song Hwajeong] Hite Jinro is leading a record high rally, raising expectations for stock price increases this year as well.

As of 9:30 AM on the 16th, Hite Jinro recorded 32,000 KRW, up 1.11% (350 KRW) from the previous day. During the session, it rose to 32,200 KRW, setting a new 52-week high again in just one day. Compared to the 52-week low of 15,850 KRW recorded on January 17 last year, it has risen 103% in one year.

Brokerages are also naming Hite Jinro as the top pick in the industry, supporting further stock price increases. Samsung Securities researcher Cho Sanghoon said, "We maintain our top pick opinion on Hite Jinro within the industry," adding, "Although there are valuation concerns due to the rapid stock price rise, considering the positive changes in the business environment, increased operating rates due to the Masan plant equipment conversion, and simultaneous increases in soju prices and volume, we believe this is the beginning of a long-term stock price rise."

Kiwoom Securities researcher Park Sangjun said, "Hite Jinro is steadily expanding its market share based on the effect of new products, so there is a high possibility that earnings estimates will be revised upward depending on changes in competitive intensity," adding, "It is creating the largest market share changes in the domestic market and considering the potential for profitability expectations to rise, we maintain our top pick view in the industry."

In particular, the beer business, which had been sluggish, is expected to turn significantly profitable starting this year. Researcher Cho said, "Hite Jinro's beer business recorded an operating profit of 47.8 billion KRW in 2013 but posted losses for five consecutive years, and last year is also likely to have an operating loss due to promotional expenses related to Terra," adding, "However, since the response to Terra is favorable, sales growth can be expected without as much cost input as last year, and with the Masan plant's equipment conversion leading to a continuous increase in operating rates, a significant profit turnaround is expected this year."

In the past, Hite Jinro's beer losses were due to fixed cost burdens not being offset in the cost of sales, but it is analyzed that the fixed cost burden will be resolved with the increase in operating rates. Researcher Cho said, "If beer sales this year reach a level similar to 2013 due to cost reduction efforts such as workforce reduction in 2017, plant conversion and new product launches in 2019 that align with global liquor trends, beer operating profit this year will be at least 60 billion KRW or more."

Last year's fourth-quarter performance is also expected to be favorable. According to financial information provider FnGuide, Hite Jinro's fourth-quarter consensus for last year is 517.7 billion KRW in sales and 39 billion KRW in operating profit. This represents increases of 9.75% and 121.59%, respectively, compared to the same period last year. Researcher Park said, "Both beer and soju sales are expected to perform well due to the effect of new products, leading to a significant increase in operating profit compared to the same period last year," adding, "Terra's fourth-quarter sales are estimated at 85.1 billion KRW, an 18% increase from the previous quarter, and soju sales are expected to increase by 23% year-on-year due to strong Jinro sales. This high-growth trend is likely to continue at least through the first half of this year."

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