[Click e-Stock] The Stock Poised for a Boost from "Black Semiconductor" Exports

Daol Investment & Securities maintained its "Buy" investment opinion and target price of 45,000 won for Dongwon Industries.

On May 13, Daol Investment & Securities researcher Lee Dayeon stated, "Dongwon Industries is currently extremely undervalued, with a price-to-earnings ratio (PER) of 6.2 times and a price-to-book ratio (PBR) of 0.5 times for this year," adding, "This undervaluation is expected to be resolved as mergers and acquisitions (M&A) for the purpose of exporting gim progress and as strategies for global food businesses become more concrete."

In particular, Lee noted, "Expectations are high for gim exports, and the company's portfolio is expanding beyond seasoned gim, which holds the No. 1 domestic market share, to include sushi gim and dried gim."

The growth of Dongwon Industries is being driven by exports of sauces and canned tuna products. Lee explained, "The Bivid Kitchen sauce brand is currently holding roadshows at more than 30 Costco locations in California, USA, and business-to-business (B2B) supply to global franchise companies is also expanding." She added, "While the export share of Dongwon Tuna's canned tuna remains modest, brand exposure is increasing through global campaigns."

For the first quarter of this year, consolidated sales amounted to 2.53 trillion won, up 9.1% year-on-year. Dongwon F&B saw increased sales due to the growth of its subsidiary Dongwon Home Food, while Starkist's sales surged as a result of pouch and product price hikes in January and increased demand for canned tuna due to storms in North America. Dongwon Systems also recorded higher sales as it expanded its lineup of high value-added materials.