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(Photo = Yonhap news) |
[Alpha Biz= Reporter Paul Lee] NH Investment & Securities predicted that Lotte Chilsung's first-quarter operating profit would fall short of market expectations due to unfavorable weather effects and increased costs. The investment opinion was 'buy' and the target price was 'maintain' 180,000 won.
"Considering the lowest-ever value, we believe the fall in stock prices will be limited and we expect earnings to recover during the peak summer season," NH Investment & Securities Co. said in a report on the 15th.
In the first quarter, Lotte Chilsung's consolidated sales are expected to rise 38% year-on-year to KRW 939.7 billion and operating profit to KRW 44.6 billion, down 25%, falling below market expectations based on operating profit. Sales growth in the beverage sector is estimated at 2% year-on-year, and the growth rate seems to have slowed due to poor business environment due to cold weather compared to the average year in March. However, as the competitiveness centered on zero products is maintained, it is not a fundamental problem and is expected to recover the growth rate of sales during the peak summer season.
NH Investment & Securities estimated the liquor sales growth rate at 3% year-on-year. Although the liquor market continues to be sluggish due to the decrease in the culture of company dinners, it is expected that the market will continue to grow as price hikes and the release of new beer products are reflected. However, compared to the same period last year, the increase in marketing costs due to the launch of new products has been a short-term burden in terms of profitability.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
