[Click eStock] "Binggrae, Profitability Improvement Expected to Boost 3Q Sales"…Target Price Upward Revised

On the 16th, IBK Investment & Securities maintained a buy rating on Binggrae, expecting strong domestic and international ice cream sales in the third quarter of this year, and raised the target price from the previous 71,000 KRW to 83,000 KRW.

Binggrae's consolidated sales for the second quarter recorded 388.7 billion KRW, up 6.7% year-on-year, and operating profit increased by 119.5% to 46.2 billion KRW. Sales largely met market expectations, while operating profit significantly exceeded them. Stable input cost trends continued, improving the cost of goods sold ratio by 3.7 percentage points, and advertising expenses were reduced by approximately 5.9 billion KRW, leading to a 2.4 percentage point decrease in selling and administrative expenses ratio. Following the first quarter, the second quarter also showed the highest operating profit margin since 2012 at 11.9%.

By segment, refrigerated product sales increased by 6.8% compared to the previous year. Tae-hyun Kim, a researcher at IBK Investment & Securities, said, "The price increase effect of key products such as Banana Flavored Milk and Yoplait continued to drive top-line growth," adding, "Marketing was also scaled back, which appears to have improved profitability."

Frozen product sales improved by 10.7%. Following the early warm weather benefits in the first quarter, the second quarter also saw continued demand expansion for ice cream products due to the heatwave, combined with price increases for products like Bungeoppang Samanco and Melona. Sales of room-temperature coffee and The Protein brand products were also reportedly strong.

Additionally, the subsidiary Haitai Ice Cream recorded sales of 57.9 billion KRW, an increase compared to the same period last year, and net profit for the period rose 30.3% to 7.3 billion KRW. Researcher Kim stated, "Sales of the China and Vietnam subsidiaries increased by 89.9% and 43.6%, respectively, and profitability improved," adding, "Although the U.S. subsidiary's sales decreased by 31.4% due to a base effect, net profit turned positive."

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