[Click eStock] "BGF Retail, Stable Investment Alternative Amid Uncertainty"... Target Price Up

[Asia Economy Reporter Ji Yeon-jin] Hana Financial Investment announced on the 17th that it raised the target price for BGF Retail from 200,000 KRW to 220,000 KRW, expecting it to benefit from the reopening and improved investor sentiment due to policy expectations from the new government.

Jongdae Park, a researcher at Hana Financial Investment, said, "The reopening is expected to benefit the company, and as the market leader, the effect of market share increase is expected to be significant. The policy expectations of the new government are an additional factor for improving investment sentiment, so the stock price momentum is positive for the time being," adding, "Amid increasing external uncertainties, it can be a stable investment alternative."

This year is analyzed to be favorable for the convenience store industry. Due to the reopening effect, sales improvement in special location stores and the F&F category is possible, and the number of stores under contract renewal reaches 4,500, so market restructuring effects are also expected.

Consolidated operating profit for the first quarter is estimated to increase by 26% year-on-year to 27 billion KRW, as same-store sales growth rises, the number of stores increases, and product mix improvement effects continue. Same-store sales growth for convenience stores in January and February is analyzed to be around 3%, exceeding competitors by more than 3 percentage points.

Researcher Park said, "The impact of Lotte Group's acquisition of Ministop is considered limited," adding, "The number of stores is not large, and it could rather be an opportunity to attract high-quality stores. If the minimum wage increase rate slows down under the new government, cost burdens could be alleviated." In 2018, the minimum wage rose by 16.5%, and major convenience store companies incurred additional costs of around 40 billion KRW to compensate franchisees' profits and losses, which was a major factor in profit decline.

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