[Click eStock] HiteJinro's Performance Up This Year... Effects of Social Distancing Easing and Price Increase

[Asia Economy Reporter Myung-Hwan Lee] Hana Financial Investment analyzed on the 18th that Hite Jinro's performance this year will exceed expectations. The investment opinion was maintained as Buy, and the target price was kept at 48,000 KRW.

Hana Financial Investment analyzed that the company's sales in the first quarter of this year will increase by 6.9% year-on-year to 571.7 billion KRW, and operating profit will increase by 6.8% to 56.5 billion KRW, surpassing market expectations. According to Hana Financial Investment, January and February saw about a 10% sales growth year-on-year due to a low base last year and increased preemptive demand ahead of the soju price hike. Although soju sales volume in March is inevitably expected to decline year-on-year, a positive spillover effect is anticipated due to competitors' beer price increases. Considering these factors, the visibility of sales growth for soju and beer in the first quarter appears to be very high.

Annual consolidated sales and operating profit for this year are forecasted at 2.4268 trillion KRW and 224.5 billion KRW, respectively. These figures represent growth of 10.2% and 29% compared to the previous year. In addition to expectations for a recovery in liquor demand, the realization of soju price hikes highlights performance momentum, and there is also a possibility of Hite Jinro raising beer prices due to competitors' price increases.

Sim Eun-Joo, a researcher at Hana Financial Investment, stated, "As we move into the second half of the year, performance will be highlighted due to the low base from the previous year, easing of social distancing, and the effect of price hikes," adding, "Considering the outstanding performance within the industry, the current stock price, which is at the historical band bottom, remains attractive."

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