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Photo: Binggrae |
[Alpha Biz= Paul Lee] DS Investment & Securities said on June 9 that Binggrae posted weak fourth-quarter results last year due to sluggish domestic consumption and rising costs, but the company is expected to strengthen its corporate value foundation this year and achieve a turnaround next year.
The brokerage lowered its target price for Binggrae from 130,000 won to 100,000 won while maintaining a “Buy” recommendation.
Binggrae reported operating profit of 88.3 billion won in 2024, down 32.7% from a year earlier, while sales rose 1.8% to 1.2896 trillion won.
Analysts Jang Ji-hye and Kang Tae-ho said the weak performance was mainly due to sluggish domestic consumption throughout the year, rising raw material costs, and increased labor-related expenses.
Despite these challenges, the analysts expect earnings to improve this year. They forecast operating profit to increase 10% year-on-year to 96.8 billion won and sales to grow 3.5% to 1.54 trillion won.
While domestic consumption remains a concern, the analysts said the decline in refrigerated product sales has been easing, and exports—particularly in the U.S. frozen dessert segment—are expected to remain strong, driven by flagship products such as Melona and Bungeo Samanco.
They added that cost-efficiency measures and export growth should support earnings recovery, though continued raw material cost pressures and temporary expenses related to the merger with Haitai Ice Cream remain potential risks.
Another key factor this year is enhanced shareholder return policies and corporate value improvement initiatives. Earlier this month, Binggrae announced plans including operational efficiency through the merger with Haitai Ice Cream, expansion in major overseas markets such as the United States, and broader market entry into Oceania and Europe using OEM production in Australia.
The company also pledged to maintain a dividend payout ratio of at least 25% of separate net income and cancel an additional 3% of treasury shares this month, the analysts noted.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
