[Click eStock] "Lotte Wellfood Target Price Raised to 230,000 Won"

On the 18th, Korea Investment & Securities raised the target price of Lotte Wellfood by 27.8% to 230,000 KRW.

Lotte Wellfood is actively operating its confectionery and ice cream business in India. The third Choco Pie production line, which began operation in October last year, is estimated to have achieved an operating rate close to 80% in the first quarter. Given the high operating rate just two quarters after starting, it is judged that there is a high possibility of additional expansion of the Choco Pie line in the future. In the second half of this year, a new ice cream factory located in Pune, eastern India, is scheduled to begin operations.

The Pune ice cream factory is currently awaiting building use approval from the Indian government, and the initial production scale is expected to be around 120 billion KRW. The first overseas factory for Pepero, planned to start operations in the second half of 2025, is also under construction in India. Considering the schedule for new factory operations, the combined sales of the Indian confectionery and ice cream subsidiaries are expected to record double-digit sales growth annually until 2026.

With the continuation of hot weather, a favorable environment is being created for the ice cream business both domestically and in India. The Korea Meteorological Administration forecasted that temperatures from June to August this year will be higher than average. In fact, temperatures have remained above average up to mid-June. The domestic ice cream business recently completed a reduction in product variety and is actively launching new products such as zero-calorie ice cream, raising expectations for an increase in market share in the ice cream sector.

Researcher Eunji Kang of Korea Investment & Securities said, "Since temperatures are expected to be higher than average during the peak season, further upward revisions of earnings are possible," adding, "In India as well, the meteorological authorities have issued the highest level of heatwave warnings, and with the continuation of hot weather, ice cream sales in the second quarter are expected to increase compared to the same period last year."