[Click eStock] "Maeil Dairies, New Product Sales Expected to Rise"

[Asia Economy Reporter Minji Lee] Kiwoom Securities maintained a buy rating on Maeil Dairies on the 13th, expecting sales growth from high value-added new products, and set a target price of 115,000 KRW.

Maeil Dairies recorded an operating profit of 20.2 billion KRW on a consolidated basis in the fourth quarter, a 6% increase compared to the previous year, but fell short of market expectations (22.7 billion KRW).

Sangjun Park, a researcher at Kiwoom Securities, said, “Profitability was weak due to higher-than-expected costs related to sales commissions and new products such as Selex,” adding, “Sales grew 9% year-on-year thanks to favorable weather conditions compared to the third quarter, strong e-commerce channel sales, and robust new product sales.”

This year, Maeil Dairies is expected to maintain its sales growth trend despite not being able to avoid the impact of the novel coronavirus (COVID-19).

Researcher Park said, “There is steady external growth centered on coffee beverages, Sangha Farm, Almond Breeze, and Selex,” and added, “Despite sluggish sales of infant formula due to a decline in the number of newborns, sales of high value-added products such as Selex have increased, steadily raising the annual gross profit margin.”

He continued, “Considering that the impact of COVID-19 is smaller compared to other companies and that the stock price is relatively undervalued, the potential for stock price appreciation within the industry is relatively high.”

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