[Click eStock] "SPC Samlip, Q1 Below Expectations... Target Price Down"

[Asia Economy Reporter Oh Ju-yeon] Daishin Securities evaluated that SPC Samlip's first-quarter performance this year fell short of market consensus, maintaining a 'Buy' rating and lowering the target price by 10% to 90,000 KRW on the 8th.

SPC Samlip's consolidated sales for the first quarter of this year were 590.8 billion KRW, and operating profit was 6.8 billion KRW, which was below the market consensus operating profit of 8.9 billion KRW.

Han Yoo-jung, a researcher at Daishin Securities, analyzed, "By segment, sales of cake, bread, hamburger, and hotteok product groups increased by 11%, 15%, 19%, and 22% respectively compared to the same period last year, resulting in sales increasing by 8% year-on-year to 147.3 billion KRW and operating profit rising by 19% to 8.1 billion KRW, meeting expectations. Additionally, fresh convenience sales increased by 26% year-on-year due to increased demand for dawn and fresh delivery, turning profitable, which is positive."

However, due to the impact of the novel coronavirus infection (COVID-19), traffic at dining stores and rest areas sharply decreased, leading to sales decline and profit deterioration. Furthermore, a one-time cost of approximately 2 billion KRW was reflected due to the closure of some low-profitability dining stores, resulting in an operating loss of 5.9 billion KRW in the store and rest area segments, showing significant underperformance.

Sales for Gapyeong Rest Area, which has been operating since September last year, were estimated at 10 billion KRW for this first quarter, with an operating loss of 3.5 billion KRW. Excluding the impact of lease accounting application, the pure operating loss was estimated at 1.7 billion KRW.

Researcher Han said, "We can expect gradual improvement in the store and rest area segments within the food business division, which experienced significant profit deterioration in the first quarter."

He added, "Although the closure of low-profitability stores involves one-time costs and negatively affects short-term performance, it is considered positive from a long-term perspective. This is because traffic at major rest areas, which sharply declined in February and March, has been showing a recovery trend since the end of April."

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