[Click eStock] "Binggrae, 2Q Earnings Growth Expected"…Target Price Upward Revised

On the 23rd, IBK Investment & Securities maintained its buy rating on Binggrae, expecting strong performance in the second quarter of this year, and raised the target price from 63,000 KRW to 71,000 KRW.

Binggrae's consolidated sales for the first quarter increased by 14.8% year-on-year to 293.5 billion KRW, and operating profit surged by 702.7% to 12.7 billion KRW. These figures significantly exceeded market expectations.

This strong performance is attributed to the price increase of Binggrae's main products and favorable export conditions. Its subsidiary Haitai Ice Cream saw sales rise by 19% compared to the same period last year, but operating profit declined due to expanded marketing expenses. Recording an operating profit margin in the 4% range during the off-season first quarter is the first time in 11 years since 2012.

By segment, refrigerated product sales increased by 10.8%. Although consumer sentiment weakened and sales volume declined, the price increase effect of key products such as Banana Flavored Milk and Yoplait sustained the growth trend. Frozen product sales rose by 19.1%. Prices of products like Bungeoppang Samanco and Melona were raised, and demand increased due to an early warm spell in March. Sales of ambient coffee and The Protein also performed well.

Second quarter consolidated sales are estimated to increase by 10% to 400.7 billion KRW, and operating profit is expected to grow by 27.4% to 26.8 billion KRW. These are forecasted to exceed consensus estimates.

Good sales performance was also observed last month. The burden of rising raw milk prices was offset by product price increases, and the average temperature in May was 0.6 degrees higher than last year. The weather in mid to late June is also likely to be warmer than usual, which is expected to expand demand for seasonal ice cream products.

Additionally, the performance of the Chinese subsidiary, which was sluggish last year, improved in the first quarter. With the reopening effect continuing, a steady recovery is expected in the second quarter as well.

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