[Click eStock] "HiteJinro, Q3 Earnings Exceed Expectations... Cost Reduction Effects"

NH Investment & Securities maintained a buy rating and a target price of 28,000 KRW for Hite Jinro on the 14th, stating that the company's performance exceeded market expectations due to cost reduction effects.

Hite Jinro's consolidated sales for the third quarter of this year amounted to 654.4 billion KRW, a 1% decrease compared to the same period last year, while operating profit fell 24% to 43.5 billion KRW. Although the operating profit continued to decline year-on-year, it was evaluated as significantly outperforming market consensus estimates.

Researcher Ju Young-hoon of NH Investment & Securities explained, "Sales in the soju and beer segments were 357.6 billion KRW and 235.6 billion KRW, respectively, which were similar to our previous estimates." He added, "In the soju market, although the overall market growth rate has slowed, it is estimated that Hite Jinro, the market leader, has maintained a stable high market share." He also noted, "In the beer segment, despite unfavorable business conditions such as a reduction in company dinners, the launch of new products helped sustain a trend of external growth."

The favorable profitability indicators compared to market expectations were analyzed to be due to cost reductions. Unlike the first half of the year, when marketing expenses increased significantly following the launch of the new beer product 'Kelly,' marketing costs this quarter were not significantly different from the same period last year.

Researcher Ju stated, "Concerns about short-term performance uncertainty due to increased marketing expenses have been resolved." He added, "Although the burden on costs due to rising raw material prices continues, some product price increases have been implemented, so it is estimated that this will be partially offset starting from the fourth quarter."

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