[Click eStock] "HiteJinro, a Buying Opportunity at Low Prices"

[Asia Economy Reporter Song Hwajeong] Hana Financial Investment maintained a 'Buy' rating and a target price of 48,000 KRW for HiteJinro on the 6th, stating that although short-term profit expectations should be lowered, considering the possibility of total demand recovery this year, it is a buying opportunity at a low price.

Hana Financial Investment estimated HiteJinro's Q4 results last year on a consolidated basis as sales of 539.6 billion KRW and operating profit of 33.1 billion KRW. This represents an increase of 4.4% and 38.7%, respectively, compared to the same period last year. Domestic beer sales are expected to decrease by 6.3%, but soju sales are projected to increase by 5.0%. Sim Eunju, a researcher at Hana Financial Investment, explained, "In October and November, the B2B (business-to-business) channel showed signs of recovery, resulting in strong sales," adding, "December, when Omicron emerged, is critical, but considering the low base last year, a similar trend likely continued in December."

HiteJinro's stock price fell 10.6% over the past two months due to the emergence of Omicron. There is an opinion that this year, as total demand for alcoholic beverages recovers, there will be opportunities for HiteJinro as well. Researcher Sim analyzed, "Last year, total demand for alcoholic beverages is expected to have decreased by double digits compared to the previous year due to stringent social distancing measures, and the total demand decline over the past two years exceeds 20%," adding, "Considering the full-scale rollout of booster shots, total demand for alcoholic beverages is likely to recover compared to the previous year."

Hana Financial Investment estimated HiteJinro's consolidated sales and operating profit for this year at 2.3975 trillion KRW and 208.3 billion KRW, respectively, representing increases of 8.7% and 20.0% compared to the same period last year. Domestic beer and soju sales of HiteJinro are estimated to increase by 15.3% and 6.0%, respectively. Researcher Sim said, "Although short-term profit expectations should be lowered, considering the possibility of total demand recovery this year, it is a buying opportunity at a low price," adding, "Considering the low base throughout the year, a comfortable year-on-year profit growth trend can be expected."