HiteJinro Continues Top-Line Growth This Year... Target Price Raised by 19%

[Asia Economy Reporter Park Jihwan] Ebest Investment & Securities on the 27th raised the target price for HiteJinro from 36,000 KRW to 43,000 KRW, a 19.4% increase, stating that topline growth will continue to be strong in 2020.

Researcher Shim Jihyun of Ebest Investment & Securities said, "Continuous topline sales growth is expected until 2020," adding, "Operating profit in the fourth quarter is projected to be around 37.3 billion KRW, slightly lower than previous estimates, but this is because the focus was placed more on scale growth than on profitability."

He stated, "Marketing expenses are expected to be incurred until this year, but since the market share trend is positive, it is not expected to pose an unexpected significant burden on the stock price." Excluding imported and exported beers, the total beer division sales volume in the fourth quarter is analyzed to grow by 30% year-on-year, and the soju division sales volume by 20%.

In particular, the sharp increase in sales volume of the beer and soju divisions this year is expected to continue, leading to steady market share expansion.

Researcher Shim emphasized, "Monthly sales volume for Terra reached a year-end peak with 2.17 million boxes in October 2019, 2.16 million boxes in November, and 2.5 million boxes in December," adding, "For Jinro Is Back, sales volume has continuously increased since its launch, achieving 820,000 boxes in October, 920,000 boxes in November, and 1 million boxes in December, maintaining a steep growth trend."

He predicted, "The beer division's market share is expected to rise to the low 40% range this year, and the soju division is expected to maintain mid-60% levels."