[Click eStock] "SPC Samlip, COVID-19 Negative Factors Priced into Stock"

DB Financial Investment Issues 'Buy' Rating and Target Price of 87,000 Won... Closing Price on 9th at 65,700 Won

[Asia Economy Reporter Kum Boryeong] DB Financial Investment has issued a 'Buy' rating on SPC Samlip's stock, analyzing that the stock price has already reflected the negative impact of the novel coronavirus disease (COVID-19). The target price was lowered from 89,000 KRW to 87,000 KRW. The closing price on the 9th was 65,700 KRW.

According to DB Financial Investment on the 10th, SPC Samlip's operating profit for the second quarter of this year is estimated at 11.8 billion KRW, down 28.9% year-on-year. The cause of the poor performance is the decline in bakery segment performance (convenience stores) due to the postponement of elementary, middle, and high school openings, and deficits at Gapyeong Rest Area.

However, the negative impact of COVID-19 is expected to weaken in the second half of the year. Jaehun Cha, a researcher at DB Financial Investment, explained, "The reduction in convenience store orders for sandwiches with a short shelf life is recovering gradually along with the normalization of school schedules. Sales at Gapyeong Rest Area are also expected to gradually normalize as highway traffic increases. Additionally, considering the one-time cost in the distribution sector (-7.2 billion KRW) incurred in the third quarter of last year, operating profit on a consolidated basis is expected to increase year-on-year from the third quarter of this year."

The negative factors are analyzed to have been pre-reflected in the stock price. Researcher Cha said, "Despite a year of poor performance due to increased labor costs, one-time expenses, and sales impact from COVID-19, we expect to enter a gradual recovery cycle from the second half of the year. The adverse effects of COVID-19 have already been reflected in the stock price, and the stock has been neglected for too long compared to peer groups."