[Click e Stocks] "Binggrae Smiled Even in the Off-Season, Record-Breaking 4Q Performance"

First Consolidated Profit in Winter Ice Cream Off-Season 4Q
Steady Growth in Overseas Sales... Reduced Seasonal Dependence

Binggrae recorded a profit for the first time last year in the fourth quarter despite the off-season for ice cream, as exports increased, achieving record-breaking performance. This year, profitability is expected to continue improving through expanded overseas sales and cost efficiency.

On the 5th, DS Investment & Securities maintained its 'Buy' rating and target price of 130,000 KRW for Binggrae, citing these factors. The closing price the previous day was 97,100 KRW.

In the fourth quarter of last year, Binggrae reported consolidated sales of 290.9 billion KRW and an operating profit of 600 million KRW. This exceeded the consensus (market forecast) operating loss of 2.9 billion KRW, marking the first profit in a quarter with a sharp decline in ice cream sales. This is attributed to an increase in exports with higher profit margins and their growing share, as well as improved efficiency in labor and marketing costs, resulting in a 4.8 percentage point decrease in the selling and administrative expense ratio compared to the same period last year. Overseas sales by subsidiaries were 13.4 billion KRW in the US, up 54% year-on-year; 8.2 billion KRW in China, up 10%; and 2.1 billion KRW in Vietnam, up 89%.

The upward trend in performance is expected to continue this year. DS Investment & Securities forecasts that Binggrae will record consolidated sales of 1.528 trillion KRW and operating profit of 141.6 billion KRW this year, increases of 4.5% and 8% respectively from last year. Although domestic sales are expected to be sluggish, the increase in export regions and product categories for ice cream and processed milk is viewed positively. Additionally, with increased promotions and advertising by overseas subsidiaries, the export sales ratio on a separate basis is expected to rise from 8.4% in 2021 to 12.8% this year.

Kim Daesung, a researcher at DS Investment & Securities, analyzed, "Although Binggrae's overseas proportion is not absolutely high, the overseas share is increasing annually based on product competitiveness, and as overseas performance diversifies, seasonal dependence is decreasing. Overseas growth is leading to improved profitability and increased dividends, which is positive."