[Click eStock] "HiteJinro, Strong Q1 Performance Expected"

Hana Financial Investment Issues 'Buy' Rating and 30,000 KRW Target Price... Closing Price on 25th at 24,400 KRW

Photo by Asia Economy DB

[Asia Economy Reporter Kum Boryeong] HiteJinro's strong performance in the first quarter of this year is expected.

According to Hana Financial Investment on the 26th, HiteJinro's consolidated first-quarter earnings are estimated at 514.8 billion KRW in sales and 32.6 billion KRW in operating profit. Sales are expected to increase by 21.7% year-on-year, with operating profit turning positive.

Thanks to last year's base effect and strong sales of new products, strong performance exceeding market expectations is anticipated. In particular, beer sales are expected to increase by 30.3% compared to the previous year.

Shim Eunju, a researcher at Hana Financial Investment, said, "Excluding imported beer, HiteJinro's manufactured beer sales are estimated to increase by 46.5% year-on-year due to strong sales of new products. We expect 85 billion KRW from the new beer product 'Terra' and 25 billion KRW from 'Filite.' Terra's sales in the fourth quarter of last year were around 85 billion KRW, and a similar trend seems to be continuing into the first quarter." She added, "Soju sales are estimated to increase by 19% year-on-year. Considering the price increase in May last year, meaningful topline growth is expected to continue through the first half of the year, driven by both volume growth and price increases. Due to the high growth in beer and soju sales, a significant improvement in profitability is also expected."

Considering the 'social distancing' measures that began in earnest this month, the liquor market in the second quarter is expected to be inevitably negatively affected. However, the market situation is expected to be driven more by consumer preferences than marketing. Researcher Shim said, "Considering the increased awareness of Terra and Jinro, the trend of rising market share for HiteJinro seems to remain valid this year as well. The possibility of downward revision of annual estimates due to COVID-19 is considered limited."

Hana Financial Investment gave HiteJinro a 'Buy' rating with a target price of 30,000 KRW. The closing price on the 25th was 24,400 KRW.

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