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Photo = Yonhap news |
[Alpha Biz= Paul Lee] KB Securities announced on July 4 that it has raised its target price for Lotte Chilsung Beverage from KRW 150,000 to KRW 155,000, citing expectations of in-line second-quarter earnings and accelerated performance recovery in the second half of the year. The company maintained its "Buy" rating.
The previous day, Lotte Chilsung's share price closed at KRW 130,400, down 1.36% from the previous session.
Analyst Eun-ae Ryu projected that the company’s consolidated operating profit for the second quarter would come in at KRW 59.8 billion, down 0.7% year-on-year, but in line with market consensus. While domestic beverage sales are expected to decline due to subdued consumer spending and unfavorable weather, improved sales from its Myanmar subsidiary are likely to boost overseas performance.
Ryu further noted that domestic sales may rebound in the third quarter, driven by the combined effects of government subsidy payments and the peak summer season. She cited historical data from the COVID-19 era, when emergency relief payments were mainly spent at restaurants and supermarkets.
The analyst also pointed out that falling prices for key raw materials such as sugar since the beginning of the year have eased cost pressures, further supporting a rebound in profitability.
As a result, KB Securities has revised its full-year operating profit forecast for Lotte Chilsung upward by 3.7%, from KRW 205 billion to KRW 213 billion.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
