[Featured Stock] "Ice Cream Effect"... Binggrae Hits New High on Earnings Improvement Expectations

[Asia Economy Reporter Ji Yeon-jin] Binggrae surged on the 4th amid forecasts that ice cream sales will increase due to the heatwave.

As of 9:43 a.m. on the same day, Binggrae was trading at 64,600 KRW on the KOSPI market, up 3.53% from the previous day. This is a 52-week high.

Earlier, Hana Financial Investment gave Binggrae a buy rating with a target price of 80,000 KRW, citing growth in both the ice cream division and the dairy beverage division this year, which could strengthen profit resilience.

Since March, Binggrae has seen a sharp recovery in convenience store traffic, which has also driven an increase in dairy beverage sales, leading to expectations of profit growth this year.

The ice cream market is currently booming due to the combined effect of increased sales of large-sized products for home use and the expansion of new channels such as ice cream discount stores. Last year, the combined sales of the four major ice cream companies (Lotte Confectionery, Binggrae, Lotte Foods, Haitai) grew by 6% compared to the previous year. In the first quarter, sales increased by about 15% compared to the same period last year. Eunju Shim, a researcher at Hana Financial Investment, explained, "Considering last year's unfavorable weather, a base effect is also expected."

The ice cream division is also expected to benefit from synergy following the acquisition of Haitai's ice cream business. In October last year, Binggrae acquired 100% of Haitai Ice Cream's shares for 132.5 billion KRW, reshaping the domestic ice cream market into a duopoly with Lotte (47%) and Binggrae (41%) as the two dominant players. Researcher Eunju Shim said, "Considering the sales scale and operating margin of competitors, there is a high possibility that Haitai's ice cream division margin will improve," adding, "Synergies between Binggrae and Haitai through improving inefficient cost structures are worth anticipating."