Advancing to the Round of 16, 'Chicken Flies' in the Extended World Cup

Sales Boom from World Cup Round of 16 Advancement
Related Stocks like Kyochon on the Rise
Convenience Store Stocks Also Likely to Benefit

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] Investors' attention is gathering on 'World Cup beneficiary stocks.' This comes as the South Korean national soccer team has reached the Round of 16 in the World Cup for the first time in 12 years. The securities industry expects that the World Cup event will have a positive impact on the performance of these stocks.

According to the Korea Exchange on the 5th, as of 9:10 a.m., Kyochon F&B was trading at 10,700 KRW, up 1.90% (200 KRW) from the previous trading day. Similarly, poultry-related stocks such as Maniker (1.99%) and Harim (1.10%) showed an upward trend compared to the previous trading day.

The rise in these stocks is presumed to be due to the expectation of benefits as the national soccer team advanced to the Round of 16. The chicken industry is considered a sector that experiences a 'World Cup boom' as orders surge before and after matches during the World Cup season. On the 28th of last month, when the match against Ghana took place, the three major domestic chicken franchises all recorded sales growth of over 100%. Kyochon F&B, which operates 'Kyochon Chicken,' announced that nationwide store sales increased by 150% compared to one week earlier and by 160% compared to one month earlier. Genesis BBQ Group, which operates 'BBQ,' also explained that sales on the same day increased by 190% compared to one week earlier and by 220% compared to one month earlier.

However, the stock prices of chicken-related stocks have drawn a downward curve since the World Cup opening, requiring caution from investors. Kyochon F&B's stock price rose to the 12,900 KRW range before the World Cup opening but then declined to the low 10,000 KRW range. The stock prices of poultry companies such as Harim and Maniker showed similar trends. The 'Shinhan FnGuide Chicken ETN,' Korea's first chicken-themed exchange-traded note (ETN) listed on the 17th of last month, has also been on a downward trend since its listing.

The securities industry forecasted that poultry-related stocks, including chicken, will show a recovery in performance triggered by the World Cup. Researcher Jongseon Park of Eugene Investment & Securities said about Kyochon F&B, "Cost increases due to rising raw material prices have already been reflected in the stock price, so further declines are limited," and added, "In the future, the stock price could turn upward along with performance recovery driven by World Cup special demand and the entry into the peak season."

Meanwhile, distribution companies operating convenience stores are also expected to benefit from the World Cup. With street cheering allowed from this World Cup, sales at nearby convenience stores have significantly increased. CU announced that from 6 p.m. to midnight on the 2nd, when the Portugal match took place, sales of major products increased significantly compared to two weeks before the World Cup opening. At GS25, sales of major items such as beer (121.3%), chicken (124.7%), snacks (99.0%), and hand warmers (327.3%) also rose sharply on the match day. Researcher Soyoung Jung of Kyobo Securities diagnosed, "CU (BGF Retail) and GS Retail will see growth in sales and operating profit due to favorable weather and the World Cup boom."