[Click eStock] "Price Increase Effect Continues... HiteJinro Target Price Maintained"

Buy Rating, Target Price 27,000 KRW
"Price Increase Effect, Marketing Cost Reduction...
Also Noting Soju Export Growth Potential"

On the 9th, IBK Investment & Securities maintained a buy rating and a target price of 27,000 KRW for HiteJinro, stating, "Although the outlook for external growth is limited due to the continued contraction in beer consumption, significant profit improvement is expected to continue thanks to price increases and marketing cost reductions." The previous trading day's closing price was 20,500 KRW.

On the same day, Kim Taehyun, a researcher at IBK Investment & Securities, said, "We maintain our existing Q3 earnings estimates for HiteJinro. The estimated consolidated sales and operating profit are expected to increase by 4.4% and 62%, respectively, compared to the same period last year, reaching 683.5 billion KRW and 70.4 billion KRW, with sales in line with market expectations and operating profit exceeding them," he said.

Q3 beer sales are expected to be 230.7 billion KRW, down 2.1% from the same period last year. Researcher Kim noted, "(Regarding the mucilage controversy) the shipment adjustment issue of the sparkling liquor Pilate is largely resolved, but due to the continued decline in the beer market, a slight decrease in sales is expected," adding, "Operating profit for this quarter is expected to increase by 223.3% to 13.4 billion KRW as the price increase is fully reflected."

Shochu is expected to maintain a better sales trend compared to beer, with the added effect of price increases. Q3 soju sales and operating profit are projected to increase by 8.8% and 83.7%, respectively, compared to the same period last year, reaching 389 billion KRW and 57.6 billion KRW. On the other hand, bottled water performance is expected to be weak. Due to a decline in high-margin highball demand and continued contraction in tonic water sales, operating profit is expected to decrease by 45%.

Attention was also drawn to the growth potential of soju exports. Researcher Kim said, "So far, export volumes have been distributed mainly through local large supermarkets and convenience stores, but sales channels are expected to expand to entertainment venues in the future," adding, "The soju plant in Vietnam is scheduled to begin construction next year, with trial operations in the second half of 2026 and full-scale production starting in 2027. Accordingly, economies of scale, raw material purchasing costs, and logistics cost reductions are expected to improve export sales margin rates," he added.