[Click eStock] Hyundai Green Food, Focus on Re-listing Event After Demerger

KB Securities Report

KB Securities evaluated on the 10th that Hyundai Green Food has become more attractive for investment due to its spin-off and re-listing.

Hyundai Green Food is an affiliate of Hyundai Department Store Group, engaged in food service businesses such as group catering, food ingredient distribution, distribution business, and dining-out business. Last year, the sales composition ratio was 39.6% from group catering, 30.4% from food ingredient distribution, 18.8% from distribution business, 9.7% from dining-out business, and 1.5% from others.

Regarding the company's investment points, performance improvement is expected due to an increase in the number of meals served in the group catering business and expansion of overseas operations. As the industry recovers, the daily number of meals served has returned to around 300,000, and demand for company cafeterias is increasing due to high inflation. KB Securities researcher Lee Kyung-eun said, “With the expected expansion of domestic companies' investments in the Middle East and the United States, there is a high possibility of additional orders for project and factory catering.”

A revaluation of the business company's value is also expected due to the spin-off. Hyundai Green Food was newly established on the 1st of last month through a spin-off from Hyundai GF Holdings. Hyundai GF Holdings is a holding company responsible for managing subsidiaries such as Hyundai Livart and Hyundai Easywell and establishing management strategies including new business investments, while Hyundai Green Food, as a business company, is in charge of food businesses such as group catering, food ingredient distribution, and health food. Researcher Lee Kyung-eun said, “Before the spin-off, it held subsidiaries engaged in furniture business, heavy equipment manufacturing, and corporate sales, so the corporate value of the food service business was not properly evaluated,” adding, “A revaluation of corporate value is expected after the spin-off.”

The fact that the corporate value was undervalued should also be kept in mind. The researcher said, “Based on the closing price before the trading suspension, Hyundai Green Food's market capitalization was 245.6 billion KRW, which is undervalued compared to peer company CJ Freshway (337.2 billion KRW).”