[Click eStock] "BGF Retail, Performance Improvement Becomes Visible"

Maintains Superior Same-Store Sales Growth Compared to Competitors
Hana Financial Investment "BGF Retail Target Price Maintained at 210,000 KRW"

[Asia Economy Reporter Gong Byung-sun] BGF Retail is expected to achieve performance improvement next year, supported by With Corona (gradual return to daily life). The market structure centered on the top two companies, along with GS Retail, is anticipated to deepen further.

According to Hana Financial Investment on the 25th, the convenience store market is estimated to grow by 6.6% next year compared to this year. Additionally, due to increased traffic in special locations, late-night hours, and areas around schools during the With Corona period, the same-store growth rate is expected to rise by more than 2% next year. The number of convenience store outlets is projected to increase by more than 2,500 compared to this year, raising the overall market growth rate by more than 4 percentage points, according to Hana Financial Investment's analysis.

The business environment for convenience store franchisees will be favorable next year. Since the cigarette price increase in 2015, the franchise renewal market has been growing since last year. Furthermore, proximity store openings are restricted, and card fees have been reduced, resulting in a record-high 4,900 renewal stores next year based on the top four companies. Consequently, the restructuring phenomenon centered on BGF Retail and GS Retail is expected to intensify.

Hana Financial Investment estimated BGF Retail's operating profit for the fourth quarter of this year to reach 45 billion KRW, a 27.4% increase compared to the same period last year. Researcher Park Jong-dae of Hana Financial Investment explained, "Not only was last year's base low, but the With Corona effect is already becoming visible," adding, "Although increased outings have negatively impacted demand for drinking alone and on-site consumption, the recovery of demand in special locations and late-night hours will enhance the same-store growth rate."

Accordingly, Hana Financial Investment maintained a 'Buy' rating and a target price of 210,000 KRW for BGF Retail. Researcher Park said, "This year, various strategies such as expanding the side dish and instant meal sectors have been implemented, giving BGF Retail an advantage in same-store growth rate compared to competitors," and added, "As a pure convenience store company successfully enhancing product development capabilities and vertical integration, it shows high earnings visibility." The closing price on the previous day was 153,500 KRW.