[Click eStock] "Pulmuone, Clear Improvement in Performance This Year"

[Asia Economy Reporter Park Jihwan] NH Investment & Securities stated on the 29th that Pulmuone appears to be the most attractive among small and medium-sized food and beverage companies this year in terms of performance improvement trends and mid-to-long-term direction, recommending a 'Buy' rating and a target price of 25,000 KRW.

Researcher Jo Mijin of NH Investment & Securities said, "Pulmuone's operating profit in the fourth quarter of last year increased by 30% compared to the previous year, but slightly missed market expectations due to increased costs." It is analyzed that the performance improvement trend based on the growth of overseas subsidiaries will continue this year. The effect of price increases for domestic tofu and namul is also expected to be reflected.

Researcher Jo explained, "Domestically, the company benefited from increased food demand within households, but the operating losses in the food service and dining-out divisions expanded, so it is expected that there will be no base effect burden even as COVID-19 eases." If last year confirmed the growth in scale of overseas subsidiaries and the possibility of resolving operating losses, this year is expected to mark the beginning of a full-scale performance increase.

He explained, "The US subsidiary's growth was limited due to capacity constraints, and it turned to a loss due to large-scale promotional events at Costco and inventory clearance costs." However, the China subsidiary, despite a decrease in operating profit margin compared to the previous quarter due to strengthened online promotions, achieved sales growth of over 100% compared to the previous year. In the case of the Japan subsidiary, the operating loss in the fourth quarter was significantly reduced to 300 million KRW.