[Click eStock] "Dongwon F&B Q3 Earnings Hold Up... Profit Improvement Trend Expected to Continue"

On the 2nd, Kiwoom Securities stated about Dongwon F&B that "its third-quarter performance this year exceeded market expectations," and forecasted stable profit growth going forward.

On the same day, researchers Park Sang-jun and Shin Dae-hyun said, "Dongwon F&B's consolidated operating profit for the third quarter was 63 billion KRW, a 40% increase compared to the same period last year, surpassing market expectations," adding, "On a separate basis, sales and operating profit increased by 9% and 24%, respectively, compared to the same period last year." The operating profit of consolidated subsidiaries also improved, increasing by 9 billion KRW compared to the same period last year.

Strong sales of canned tuna and price increases of key products formed the foundation for the strong performance. Researcher Park said, "The average selling price rose due to price hikes of key products, and canned tuna sales showed high growth in the 20% range. Stabilization of pork raw material input costs also had an impact," adding, "especially the core product category of canned tuna has been experiencing a growth trend of over 20% throughout this year as the demand for cost-effective home meals intensified due to consumption polarization after inflation."

Researcher Park said, "Demand for high-priced convenience foods has relatively contracted, while demand for cooking ingredients like canned tuna has been relatively strong. The canned tuna category is a relatively profitable item, and raw material input costs (tuna raw fish) have shifted from their peak to a decline, increasing the potential for cost ratio improvement. Therefore, the performance of the separate corporation is expected to continue improving in the medium term."

Researcher Park added, "The intensity of competition in the processed food market is also being maintained at a stable level. As the profitability of major competitors deteriorates, promotional competition within the domestic processed food market is shrinking. Subsidiary Dongwon Home Food (food ingredient distribution, etc.) is also demarketing underperforming clients (marketing that intentionally reduces customer demand), and since raw material costs for sauces, mainly sugar, are stabilizing, the profit and loss improvement trend is expected to continue." The buy investment opinion and target stock price of 50,000 KRW were maintained.

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