[Click eStock] "Binggrae, Ice Cream Sales Soar Due to Early Heat ... Target Price Up 10%"

[Asia Economy Reporter Minji Lee] IBK Investment & Securities maintained a buy rating on Binggrae on the 20th and raised the target price by 10% from the previous level to 88,000 KRW. This decision was based on the expectation that ice cream sales could improve this year due to the early onset of warm weather.

In the first quarter, Binggrae recorded sales and operating profit of 193.4 billion KRW and 6.3 billion KRW, respectively, marking increases of 9.6% and 1.9% compared to the same period last year. The company’s ice cream sales improved significantly, exceeding the market’s expected operating profit of 5.8 billion KRW.

Sales in the frozen segment rose 11.7% year-on-year to 70.6 billion KRW. Tae-hyun Kim, a researcher at IBK Investment & Securities, explained, “This winter season was exceptionally warm, and due to the impact of COVID-19, there was a stockpiling demand for ice cream, leading to a substantial increase in ice cream sales despite it being the off-season. There was balanced growth across all ice cream product lines, including bar products, and profit margins also improved.”

The refrigerated segment recorded sales of 120.1 billion KRW, up 8.7% year-on-year. Demand for immunity-boosting foods increased due to COVID-19, resulting in about a 3% increase in sales of fermented dairy products such as Yoplait. Coffee beverage sales also rose by approximately 5%. However, profit margins slightly declined compared to the previous year due to the burden of last year’s first-quarter performance, which saw a large profit increase from the price hike of Banana Flavored Milk, and increased marketing expenses across fermented dairy and other beverage products.

Consolidated sales and operating profit for this year are estimated at 941.8 billion KRW and 52 billion KRW, respectively, representing increases of 7.2% and 13.5% compared to the same period last year. Researcher Tae-hyun Kim stated, “Since mid-April, the early warm weather has begun, and with a heatwave expected this summer exceeding average temperatures, the improvement in ice cream sales in the second and third quarters is expected to be significant. In fact, the sales growth rate of ice cream in April is expected to exceed 10% compared to a year ago.”

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