[Click eStock] "Dongwon F&B, Online Business Expansion Expected to Boost Performance"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment forecasted on the 18th that if Dongwon F&B successfully strengthens its online business this year, its sales will increase significantly more than expected. The investment opinion was maintained as "Buy," with a target price of 280,000 KRW.

Consolidated sales and operating profit for the first quarter are expected to increase by 6.5% and 7.1% year-on-year, reaching 834.9 billion KRW and 39.1 billion KRW, respectively. Considering the timing difference in reflecting Lunar New Year gift set sales, it is judged that market expectations will be sufficiently met.

Processed food sales are estimated to increase by 6% year-on-year, reflecting Lunar New Year gift set sales. As social distancing continues, demand for HMR (Home Meal Replacement) and canned ham is also expected to remain strong.

The price of tuna input in the first quarter is expected to be around 1,300 USD, similar to last year, so cost burden is expected to be limited. The food sector is predicted to improve profitability compared to the previous year. Eunju Shim, a researcher at Hana Financial Investment, explained, "Dongwon Home Food's performance assumptions were conservative," and added, "Dongwon Farms is expected to see a slight profit increase compared to last year due to scrapping low-profit customers."

The Dongwon division plans to maximize mid- to long-term synergy through integrated online organization operations. Recently, Dongwon Group announced that it will consolidate 'Dongwon Mall (Dongwon F&B online business division), The Banchan (Dongwon Home Food HMR business division), and Geumcheon Meat (Dongwon Home Food Geumcheon division)' into the Dongwon Home Food online business division to strengthen online channels. Researcher Shim stated, "Last year, Dongwon F&B's online channel sales accounted for an estimated 8%, which is understood to have grown more than 30% compared to the previous year," and added, "This year, it is expected to exceed 10%, continuing the sales growth trend."

Consolidated sales and operating profit for this year are expected to grow by 7% and 9.2% year-on-year, reaching 3.3906 trillion KRW and 127 billion KRW, respectively. If online strengthening is achieved, the sales growth rate is predicted to be even higher. Researcher Eunju Shim said, "In the short term, first-quarter performance will also meet market expectations," and added, "The current stock price is trading at a 12-month forward price-to-earnings ratio (PER) of 8 times, representing an attractive valuation."

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