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View of Hite Jinro office. (Photo=Hite Jinro) |
[Alpha Biz= Reporter Kim Minyoung] On the 16th, Sangsangin Securities raised its target price for HiteJinro (000080) by 8%, reflecting ongoing improvements in cost ratios.
HiteJinro achieved consolidated revenue of 665.2 billion won and operating profit of 68.2 billion won in Q2, significantly surpassing market expectations and marking an earnings surprise.
Sangsangin Securities noted that, similar to Q1, HiteJinro's improved profitability was driven by a reduction in cost ratios and marketing expenses, leading to a decrease in selling, general, and administrative expenses (SG&A). The margin improvement expanded from 1.4 percentage points in Q1 to 8.4 percentage points in Q2, helped by a low base effect from the previous year.
The operating profit of the soju segment surged by 206% year-over-year. Sangsangin Securities attributed this growth to frequent rainy days and adverse economic conditions, as well as the inventory replenishment effect following the clearance of old stock due to the brand and logo renewal in the previous quarter.
As a result, Sangsangin Securities raised its target price for HiteJinro from 25,000 won to 27,000 won while maintaining a "Buy" rating. They expect HiteJinro to continue reducing marketing expenses and improving cost ratios in the second half of the year, anticipating continued profit growth in Q3.
AlphaBIZ Kim Minyoung(kimmy@alphabiz.co.kr)
