[Click eStock] "HiteJinro, Price Increase and Reopening Expand Upside Potential... Year-End Turnaround Expected"

[Asia Economy Reporter Kwon Jae-hee] Cape Investment & Securities upgraded its investment opinion on HiteJinro to 'Buy' on the 13th, but lowered the target price to 35,000 KRW. Although the target price was lowered due to revisions in earnings estimates and changes in the target price calculation method, the investment opinion was upgraded to Buy due to an increased upside potential compared to before.

HiteJinro's consolidated sales for the third quarter are expected to be 611.6 billion KRW, with an operating profit of 55.1 billion KRW. By segment, beer sales are expected to increase by 6.4% year-on-year, with operating profit rising by 11.6%. The soju segment is expected to see sales and operating profit increase by 11.3% and 36.8%, respectively, over the same period. Both beer and soju saw an increase in the share of their respective channels compared to the previous year due to the recovery of the entertainment market amid the spread of the endemic atmosphere. However, beer sales declined compared to the previous quarter due to adverse weather caused by frequent rainfall during the peak season in the third quarter. Meanwhile, competition has intensified, but there is room to respond due to reduced marketing expenses in the first half compared to the annual marketing budget. Market share for beer remained stagnant, while soju's market share slightly increased. The strike issue, which started in the second quarter and acted as a negative factor throughout the third quarter, ended in September, but one-time costs related to this are expected to occur.

Kim Hye-mi, a researcher at Cape Investment & Securities, analyzed, "The price increase effect of soju and beer products implemented in the first quarter of this year and the expansion of the reopening trend have expanded the upside potential due to continued company-wide sales and profit growth in the third quarter." She added, "A stock price turnaround is expected around the end of the year when cost issues are resolved, so we recommend an active buy response."

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