[Click eStock] "BGF Retail, Good Performance Expected Due to Eased Social Distancing Measures"

[Asia Economy Reporter Lee Jung-yoon] Hyundai Motor Securities maintained a buy rating and a target price of 230,000 KRW for BGF Retail on the 22nd, expecting the company to record favorable operating results in the first quarter of this year due to the easing of social distancing measures.

BGF Retail's consolidated sales for the first quarter of this year are analyzed to have increased by 7.1% year-on-year to 1.6076 trillion KRW, and operating profit rose by 19.6% to 25.8 billion KRW. Park Jong-ryeol, a researcher at Hyundai Motor Securities, explained, "Despite the recent spread of Omicron, the easing of social distancing measures has increased foot traffic, which is positively affecting the convenience store industry," adding, "Although the prolonged COVID-19 situation due to the Omicron spread is somewhat burdensome, it is not judged to be severe enough to damage the convenience store industry."

Park also added, "The operating profit growth rate in the first quarter of this year will significantly exceed the top-line growth rate, due to continuous improvement in gross profit margin from a mix focused on high-margin products, as well as strengthened profit and loss standards and operational efficiency in special location stores and subsidiaries."

Hyundai Motor Securities slightly revised upward BGF Retail's performance for this year due to the favorable performance trend. Consolidated sales for this year are expected to increase by 6.2% year-on-year to 2.002 trillion KRW, and operating profit is forecasted to rise by 11.8% to 222.9 billion KRW.

Researcher Park stated, "Although a slowdown in growth is inevitable this year due to the high base effect from the previous year, steady growth is expected to continue," adding, "Consistent new store openings and the recovery of underperforming special location stores will act as positive factors for improved performance this year."

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