[Click eStock] "HiteJinro, Earnings Improvement Starting from Q2"

[Asia Economy Reporter Song Hwajeong] IBK Investment & Securities forecasted on the 1st that HiteJinro's performance will improve starting from the second quarter of this year as COVID-19 vaccine supply becomes full-scale, maintaining a 'Buy' investment rating and a target price of 51,000 KRW.

HiteJinro's first-quarter performance this year is expected to fall short of market consensus due to the impact of social distancing measures. IBK Investment & Securities estimated that HiteJinro's consolidated sales and operating profit for the first quarter would be 498.5 billion KRW and 39.4 billion KRW, respectively. These figures represent decreases of 6.6% and 29.8% compared to the same period last year. Researcher Kim Taehyun of IBK Investment & Securities stated, "Following the fourth quarter of last year, sales are expected to decline due to the continued implementation of social distancing."

Sales in the beer segment for the first quarter are expected to have decreased by 8.9% year-on-year, with operating profit down by 25.9%. The soju segment is estimated to have seen sales and operating profit decline by 5.3% and 28.2%, respectively. Researcher Kim explained, "Due to social distancing, beer sales volume in January dropped by more than 20%. In February, with the easing of distancing levels outside the metropolitan area and the extension of operating hours by one hour for restaurants and bars in the metropolitan area, sales volume only slightly decreased compared to the same month last year. Considering that soju sales volume decreased by more than 10% in January, even if sales performed well in February and March, some sales gaps are inevitable."

From the second quarter, performance improvement is expected. IBK Investment & Securities projected that HiteJinro's annual sales and operating profit this year will increase by 5.9% and 9.5%, respectively, compared to the previous year. Researcher Kim said, "With the expansion of vaccine supply from April, there is a valid expectation for improved sales performance of on-premise alcoholic beverages due to the recovery of the dining and entertainment market in the second half of the year. Recently, Jinro Is Back reduced its alcohol content to 16.5 degrees, which will help increase soju sales when the on-premise alcoholic beverage market recovers."

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