[Click eStock] "Hyundai Green Food, Expecting Corporate Value Increase After Transition to Holding Company"

IBK Investment & Securities Report

On the 22nd, IBK Investment & Securities stated that Hyundai Green Food is expected to see an increase in corporate value following its transition to a holding company.

Attention should be paid to Hyundai Green Food's operating companies after the transition to a holding company. The initial stock price of the operating companies after the split is expected to remain undervalued, and due to the split of consolidated subsidiaries, the fundamentals of the operating companies are likely to be highlighted.

Last year, the company's sales and operating profit were 1.924 trillion KRW and 74.6 billion KRW respectively, representing growth of 15% and 72% compared to the previous year. This marked the best performance in history following Hyundai F&G, Hyundai Food System, and Hyundai H&S. Until now, the individual business units' operating results had not received much attention due to poor consolidated performance from Everdigm and Hyundai Livart.

Nam Seong-hyun, a researcher at IBK Investment & Securities, explained, "Despite high asset value before the split, poor performance from the building materials affiliates and some subsidiaries (Everdigm, Hyundai Livart) limited the increase in corporate value. After the split, asset value will be incorporated into the holding company, but excluding consolidated subsidiary results will rather highlight the strong fundamentals of the core business."

The company's performance growth trend is expected to continue. This year, the company's operating profit is forecasted to exceed 80 billion KRW. Growth is anticipated from the expansion of market share in school meal ingredients, increased food consumption due to higher operating rates in the automobile and shipbuilding industries, new sales growth from the expansion of the military meal ingredient market, and margin improvement from increased CK operating rates. Researcher Nam stated, "In the mid to long term, growth is also expected from increased overseas business sales and expanded product supply through greeting and CK," adding, "The fundamentals of the core business will continue to improve."