[Click eStock] "Binggrae, Banana-flavored Milk Export 'Storm Growth'... Target Price Up 28%"

Multiple Competitive Categories → Positive Export Outlook
Q1 Sales, Refrigerated Items Overseas Sales Grow 34%
Expanding Sales Centered on Banana-Flavored Milk in the US

On the 17th, DS Investment & Securities raised the target price for Binggrae by 28%, from 78,000 KRW to 100,000 KRW, citing expected profitability improvement due to an increase in overseas sales ratio. The investment opinion 'Buy' was also maintained. Binggrae's closing price on the previous trading day was 75,600 KRW.

Jang Ji-hye, a researcher at DS Investment & Securities, stated, "The target price increase for Binggrae is due to the upward revision of the 2024 estimates and the target multiple being raised from 8 times to 9 times." She added, "Binggrae holds a variety of competitive categories ranging from various ice cream brands to processed milk, juice, and coffee, so there is a high possibility of further target price increases as the overseas sales ratio expands."

Binggrae's first-quarter results showed consolidated sales of 300.9 billion KRW and operating profit of 21.1 billion KRW, exceeding market expectations (operating profit of 13.2 billion KRW). Despite market sluggishness due to seasonal factors, export sales with high margins grew, and profitability improved notably through efficiency in selling and administrative expenses. For refrigerated products, domestic sales grew by only 1.8% compared to the previous year, but overseas sales increased by 34%, mostly contributed by the export growth of 'Banana-flavored Milk.' Frozen products also saw domestic sales growth of 2.4% and export growth of 9.7%.

Researcher Jang said, "Binggrae's 2024 performance is expected to reach consolidated sales of 1.4623 trillion KRW and operating profit of 135 billion KRW," adding, "With the gradual expansion of overseas sales ratio and cost efficiency, the profitability improvement trend seen in the first quarter will continue." The proportion of export sales on a separate basis is expected to increase from 7.8% in 2020 to 9.6% in 2022 and 12.2% this year. Particularly positive is the growth in the U.S. subsidiary, which is expanding its category with refrigerated products such as Banana-flavored Milk. The second-quarter performance is expected to grow especially due to seasonal factors.