[Click eStock] "HiteJinro, 3Q Earnings Expected to Fall Short of Estimates... Target Price Maintained"

Hyundai Motor Securities forecasted on the 6th that Hite Jinro's third-quarter earnings this year would fall short of market expectations. However, they maintained the target stock price of 25,000 won and a buy rating.

HiteJinro's Kelly

On the day, Heeji Ha, a researcher at Hyundai Motor Securities, said, "Hite Jinro is expected to record earnings below the market consensus (estimates) in the third quarter." Hite Jinro's consolidated sales for the third quarter amounted to 668.5 billion won, a 1.7% increase compared to the same period last year. However, operating profit was 19.8 billion won, down 65.3% from the same period last year. Researcher Ha explained, "As in the second quarter, competition in the beer market is intensifying, and the trend of spending on marketing to establish the new product Kelly in the market continues. The rising cost burden of raw materials such as alcohol and malt will also act as a factor reducing profits."

Hite Jinro's third-quarter beer sales rose 7% compared to the same period last year due to strong sales of Kelly. Although the beer market was somewhat sluggish due to unfavorable weather, it is analyzed that there were results from Kelly marketing. Hite Jinro's estimated beer market share is 39%, and Kelly's share rose to 23% as of September. Separate soju sales decreased by 2% compared to the same period last year.

Researcher Ha left open the possibility of an upward trend in the stock price. While stating, "Profit decline is inevitable due to intensive marketing expenses for Kelly and rising manufacturing cost ratios," he added, "The stock price could rise at the point when profit leverage appears due to future increases in liquor prices or continued strong sales of Kelly." He emphasized the need to pay attention to whether Hite Jinro will raise liquor prices, as competitor OB Myeongju plans to increase the prices of its main products by 6.9% starting from the 11th.

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