[Click eStock] "Shinsegae Food, Disappointed by Low Non-Group Company Sales Ratio"

On the 24th, IBK Investment & Securities evaluated that the low proportion of non-group company sales in Shinsegae Food remains a regrettable aspect. They maintained a 'Buy' investment rating and a target price of 58,000 KRW.

Shinsegae Food's consolidated sales for the first quarter of this year increased by 9.3% year-on-year to 381.8 billion KRW, and operating profit for the same period rose by 1.7% to 4.6 billion KRW.

Nam Seong-hyun, a researcher at IBK Investment & Securities, stated, "Although there was significant top-line growth in the first quarter, profitability was somewhat disappointing. However, we expect performance to improve further in the second quarter." He added, "An increase in supply sales due to the expansion of distribution channels within the group and the efficiency improvement of the dining-out business division are anticipated. Regarding group catering, it is positive that the number of meals served is increasing amid a worsening consumer economy."

However, Nam said that the low proportion of non-group company sales remains a regrettable aspect. He analyzed, "Currently, growth is mainly driven by supplying manufactured products within the group and the expansion of SCK Company bakery. But considering the high likelihood of a decrease in supply volume within the group in the future and the inability to continuously expand the SCK Company store network, it is necessary to increase the proportion of sales to general companies."

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