[Click eStock] "Hyundai Green Food, Strong Growth Continues in 3Q... Concerns Premature"

IBK Investment & Securities maintained a buy rating and a target price of 25,000 KRW for Hyundai Green Food on the 31st, stating that the company’s earnings growth trend is expected to continue into the third quarter of this year.

Hyundai Green Food’s third-quarter sales are estimated to reach approximately 600.8 billion KRW, up 14.4% year-on-year, with operating profit expected to increase by 23.0% to 27.3 billion KRW.

Nam Seong-hyun, a researcher at IBK Investment & Securities, explained, "The reason for expecting positive earnings is the rapid recovery in the business conditions of major clients, leading to an increase in meal volumes, as well as sales growth in food distribution due to the holiday effect." He added, "Growth is also anticipated from expanded military meal contracts, increased meal volumes through expanded supply of finished products, and growth from the expansion of overseas site supply channels."

He continued, "Although the operating performance growth rate in the third quarter may appear lower compared to the first and second quarters, considering the one-time income in the third quarter of last year and the high base, this can be viewed as a more positive situation. Taking this into account, the actual growth rate is expected to exceed approximately 40%."

Some have expressed skepticism about next year’s earnings growth due to this year’s high earnings growth and increased demand for group meals driven by inflation.

However, it is assessed that these concerns are premature, as price negotiations allow for increases in group meal prices, and growth is expected from the expanded share of military meal ingredient supply and increased manufacturing line operating rates. Additionally, there is analysis that growth potential through the expansion of overseas sites is high.

Researcher Nam stated, "Hyundai Green Food’s overseas meal sales are expected to approach about 100 billion KRW this year," adding, "Overseas meal sales are likely to increase further due to the expansion of major client sites and increased operating rates, and the expansion of major subsidiaries’ overseas business locations is also expected, which is viewed positively."

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