[Click eStock] HiteJinro Raises Target Price by 20% After 1 Year and 9 Months

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Daishin Securities maintained its buy rating on HiteJinro on the 7th and raised the target price by 20% to 49,000 KRW.

Han Yoo-jung, a researcher at Daishin Securities, said, “With market recovery expected this year and HiteJinro’s market share anticipated to rise accordingly, we judged that there is insufficient basis for a discount,” adding, “We calculated the target price by applying the peer group average.”

This year, the domestic beer and soju markets are expected to grow by 5% and 7%, respectively. During the first quarter, soju companies’ price increase decisions continued, and the soju market is expected to experience high single-digit growth due to volume increases from market recovery combined with the price hike effect. Volume decline due to price resistance is estimated at around 2%.

Following a 7.7% price increase by a competitor on domestic beer on the 2nd, the possibility of a beer price increase by HiteJinro has also risen. Excluding 2019, when there was a change in pricing policy, the competitor’s domestic beer price hike is the first in about six years since 2016, and price resistance in the entertainment market is analyzed to be minimal.

Due to last year’s base effect, export soju sales are expected to show a pattern of low in the first half and high in the second half. Soju sales volume will show increased monthly performance volatility until the first quarter due to pre-holiday and pre-price increase demand, but from the second quarter onward, reflecting the price increase effect, growth of 9-12% year-on-year is expected.

Beer sales are expected to show a gradual market share increase centered on Terra. The growth rate of imported beer sales compared to the same period last year is expected to be 2% in the first half and 4% in the second half. Although volume is expected to slightly decrease, profitability is predicted to improve due to the price increase effect.

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