[Click eStock] "Lotte Chilsung, Effective Low-Price Buying... Overseas Performance Growth Expected"

Target Price Maintained at 150,000 KRW

Daishin Securities on the 11th expressed the opinion that Lotte Chilsung presents a buying opportunity at a low valuation, considering the mid- to long-term overseas performance improvement.

On the same day, Hansol Jeong, a researcher at Daishin Securities, assessed this year's business conditions, stating, "Domestic consumption slowdown and high exchange rates will continue to impose cost burdens, resulting in an unfavorable operating environment." However, he added, "The core categories, zero-carbonated drinks and soju, maintain competitiveness through sales growth, and this year, competitiveness will be strengthened through new product launches such as flavor expansion," and "Sales growth is expected when domestic consumer sentiment recovers."

He also forecasted performance growth overseas. Researcher Jeong said, "The profitability improvement project for the Philippine subsidiary is expected to be completed in the third quarter of this year, and the highly profitable Myanmar subsidiary completed capacity (CAPA) expansion last year," adding, "Based on their steady growth, the contribution of overseas subsidiaries to performance will expand." He emphasized, "The current stock price sufficiently reflects domestic sluggishness, and considering the low valuation and mid- to long-term overseas results, buying at a low price is valid." He maintained a 'Buy' investment opinion and a target price of 150,000 KRW for Lotte Chilsung.

Lotte Chilsung's consolidated sales in the fourth quarter of last year were 923.3 billion KRW, similar to the previous year, and operating profit increased by 16% year-on-year to 9.2 billion KRW. Analysts suggest that despite the continued domestic consumption slowdown, the poor performance below consensus was due to cost burdens and one-time labor-related expenses.