[Click eStock] "Dongwon F&B, Unmissable Profit Improvement"

[Asia Economy Reporter Jang Hyowon] DB Financial Investment analyzed on the 2nd that Dongwon F&B's operating profit is expected to show a clear and strong improvement trend over the next two years.

Researcher Cha Jaehun of DB Financial Investment stated in a report on the same day, "Last year's cost increase factor was approximately 100 billion KRW, and profitability decline was successfully defended through internal capabilities such as SG&A expense control and price increases," adding, "The international tuna price, which had risen to 1,800 USD per ton, has fallen to the 1,600 USD range, and considering the stabilization of international oil prices, the downward trend is expected to continue."

Researcher Cha Jaehun said, "The KRW/USD exchange rate fell from the 1,400 KRW range to the 1,200 KRW range, and considering the recent stable market dominance of tuna cans exceeding 82%, the profitability of the tuna can segment, which had shrunk last year, is expected to recover normally," and analyzed, "Although the industry is sluggish despite product price increases due to rising crude oil prices, the impact on the company's overall performance is not significant compared to competitors."

Researcher Cha explained, "Price increases for general foods such as tuna cans, porridge, gim, frozen foods, and instant foods have been successfully implemented, and profitability improvement due to stabilization of major raw materials and the KRW/USD exchange rate will begin in earnest," adding, "Although the food ingredient segment's business conditions may weaken somewhat due to the possibility of a dining-out recession, the effect will be offset by the recovery of the sauce segment (Samjo Celtic), which experienced a temporary decline in operating rate, and the considerably positive sales growth in the meat segment (Geumcheon Meat)."

He continued, "Despite active promotional activities during the margin spread expansion phase and the possibility of increased investments (ERP investment, US company M&A, etc.), Dongwon F&B's operating profit is highly likely to show a clear and strong improvement trend over the next two years," he analyzed.