[Click eStock] "BGF Retail, Stable Growth Expected in the Second Half"

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[Asia Economy Reporter Song Hwajeong] Hanwha Investment & Securities maintained its 'Buy' rating and target price of 220,000 KRW for BGF Retail on the 24th, expecting stable growth to continue in the second half of the year.

Nam Seonghyun, a researcher at Hanwha Investment & Securities, said, "With increased outdoor activities, the potential recovery of customer attraction, and the effect of disaster relief funds, stable growth is expected in the second half." He added, "The 'With Corona' (gradual return to normal life) era ultimately centers on increased outdoor activities, and as gradual growth continues, this increase will stimulate convenience store demand."

Hanwha Investment & Securities forecasted BGF Retail's third-quarter earnings to be 1.8669 trillion KRW in sales and 79.6 billion KRW in operating profit, representing increases of 10.9% and 25.1% respectively compared to the same period last year. Researcher Nam explained, "The business environment in August was negative due to the heatwave and rainfall, but September is likely to be positive due to the distribution of disaster relief funds and favorable weather."

Concerns about margin decline due to disaster relief funds are considered unfounded. Same-store sales growth in the third and fourth quarters is likely to be positively affected by the inflow of disaster relief funds. Some have raised concerns about margin decline due to an increase in the tobacco proportion similar to last year. Researcher Nam stated, "Last year, convenience store demand was mostly for purpose-driven purchases, but now overall demand is increasing due to expanded outdoor activities, so such concerns are unfounded," adding, "Margins are expected to be similar to the first half." He further noted, "In the second half, overall customer attraction will increase, and if policies change with the With Corona phase, this attraction will recover even more."

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