Foreign Investors and Institutions Also Buy Reopening Beneficiaries 'Food and Beverage'... What Is the Future Outlook?

[Asia Economy Reporter Kwon Jae-hee] Interest in food and beverage stocks, which showed strength even during the COVID-19 pandemic, remains high. Food and beverage stocks are representative defensive stocks that are not significantly affected even during periods of interest rate hikes aimed at controlling inflation, like now. With institutions and foreign investors also observed accumulating reopening-related stocks, the market seems to have high expectations for economic normalization.

According to the Korea Exchange on the 19th, among the top 50 net purchases by foreigners and institutions in February, many reopening-related stocks such as HiteJinro, Amorepacific, Nongshim, Cosmax, Jeju Air, CJ CheilJedang, Lotte Chilsung, and CJ Freshway were included.

The securities industry is also raising target prices for reopening stocks.

NH Investment & Securities maintained a 'Buy' rating on HiteJinro and raised the target price from 40,000 KRW to 42,000 KRW.

Researcher Jo Mi-jin of NH Investment & Securities evaluated, "Although volatility due to the COVID-19 situation and social distancing regulations still exists, with the gradual recovery of daily life this year, alcohol demand is expected to gradually return to normal."

Along with HiteJinro, Lotte Chilsung, considered a representative food and beverage stock, is also noteworthy. Shinhan Financial Investment maintained a 'Buy' rating on Lotte Chilsung and raised the target price from 180,000 KRW to 210,000 KRW.

Researcher Jo Sang-hoon of Shinhan Financial Investment analyzed, "Lotte Chilsung plans to capture both growth and profitability by launching functional products, expanding zero-carbonated beverages, and releasing new products that align with consumer trends this year. The beer business is also expected to return to profitability this year."

However, experts advise caution as many reopening stocks have risen based on expectations of daily life recovery rather than fundamentals.

Researcher Han Ji-young of Kiwoom Securities said, "Rather than betting solely on expectations, it is time to focus on earnings visibility," and analyzed, "Attention should be paid to solid stocks whose earnings forecasts are continuously being revised upward in earnings announcements."

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