[Click eStock] "HiteJinro, Prolonged Impact of COVID-19... Target Price Down 17%"

[Asia Economy Reporter Park Jihwan] Daishin Securities maintained a 'Buy' rating on HiteJinro on the 15th, citing the prolonged impact of COVID-19, but lowered the target price by 16.7% from the previous 60,000 KRW to 50,000 KRW.

On the same day, Han Yoojung, a researcher at Daishin Securities, explained, "Due to the prolonged COVID-19 situation causing stagnation in the alcoholic beverage market, significant changes in the market are not expected in the first half of the year, leading to the downward adjustment of the target price."

In the fourth quarter of last year, HiteJinro's consolidated sales were estimated at 516.6 billion KRW, and operating profit at 23.9 billion KRW, representing increases of 8% and 27% respectively compared to the previous year. However, with the social distancing level raised in November last year, the on-premise alcoholic beverage market's sluggishness deepened compared to the first to third quarters, marking an unprecedented difficult period. Analysis shows that in the fourth quarter, the market size decreased by 17% for beer and 12% for soju compared to the same period last year.

Beer sales are estimated to have decreased by 13% year-on-year, but sales of Terra beer increased by 6% compared to the same period last year, which is believed to have mitigated the decline relative to the market situation.

Researcher Han stated, "Despite the market contraction in soju, Jinro's sales increased by 14% year-on-year, so domestic soju sales are estimated to have decreased by only 9% compared to the same period last year." He added, "Export sales, mainly of fruit soju, continued to increase, rising by 5% year-on-year."