[Click eStock] "HiteJinro, Expecting Earnings Rebound in Second Half Amid Industry Recovery"

[Asia Economy Reporter Song Hwajeong] NH Investment & Securities maintained a 'Buy' rating and a target price of 50,000 KRW for HiteJinro on the 15th, forecasting that the liquor industry will enter a normalization phase in the second half of the year.

Researcher Jomi Jin of NH Investment & Securities stated, "The increase in liquor consumption, which had been suppressed, will accelerate as it coincides with the extension of operating hours for restaurants and entertainment facilities," adding, "With the vaccination rate also rising, the liquor industry is expected to enter a normalization phase in the second half of the year." Along with this, it is anticipated that HiteJinro's market share, which had stalled, will resume its upward trend as sales grow not only in the home-use sector but also in the commercial-use sector.

Overseas performance is also expected to stand out. Researcher Jo said, "Efforts to expand sales in overseas markets have begun to be reflected in the performance," and added, "With the acceleration of global reopening and overseas growth rates, the previously disappointing overseas sales ratio is increasing, and the overseas market will establish itself as a mid- to long-term growth driver for HiteJinro."

NH Investment & Securities estimated that HiteJinro's consolidated sales and operating profit in the second half of the year will increase by 9.2% and 28.7%, respectively, compared to the previous year. Although domestic beer and soju performance on a separate basis are expected to be somewhat sluggish due to unfavorable operating conditions until the second quarter, a recovery is expected across all areas?from domestic beer and soju to overseas exports?supported by a strong rebound in the liquor industry in the second half. Researcher Jo said, "Due to operating regulations, the recovery of liquor entertainment channels among distribution channels has been the slowest, resulting in a relatively slow rise in HiteJinro's stock price; however, a simultaneous recovery in performance and stock price at a level sufficient to compensate for this is expected in the second half."

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