[Click e-Stock] "SPC Samlip Faces Prolonged Investor Sentiment Recovery Due to Safety Accidents... Investment Rating and Target Price Lowered"

Investment Rating Downgraded from "Buy" to "Neutral"
Target Price Lowered by 20.5% Compared to Previous Level

On May 23, IBK Investment & Securities downgraded its investment opinion on SPC Samlip from "Buy" to "Neutral (Trading Buy)" and lowered its target price from 74,000 won to 59,000 won, citing the prolonged recovery of investor sentiment due to recurring safety accidents.

Kim Taehyun, a researcher at IBK Investment & Securities, stated, "In addition to poor earnings, the recent fatal workplace accident and resulting production disruptions are expected to have a negative impact on both the share price and earnings for the time being," adding, "It will take a considerable amount of time to restore investor confidence, which has been undermined by repeated serious accidents."

In the first quarter of this year, SPC Samlip posted consolidated sales of 814.8 billion won and operating profit of 16.1 billion won. These figures represent decreases of 1.9% and 7.2%, respectively, compared to the same period last year. Kim noted, "First-quarter results fell short of consensus," explaining, "Profitability in key segments such as bakery, food, and distribution weakened due to increased selling and administrative expenses, including advertising and outsourcing costs."

It is analyzed that recurring safety accidents have led to a decline in both the share price and investor sentiment. Kim said, "Over the past five years, injuries and fatalities have repeatedly occurred within the SPC Group, each time damaging the company’s image and weakening investor sentiment. In particular, following fatal accidents in 2022 and 2023, the three-month share price returns were -10% and -7.8%, respectively, and the six-month returns were -6.0% and -13.1%, indicating that recovery has not been easy. In addition, institutional and foreign investors showed a clear tendency to be net sellers whenever a safety accident occurred."

Persistent ESG (Environmental, Social, and Governance) risks are inevitably negative for corporate value. Kim pointed out, "Regardless of earnings, the entrenchment of ESG risks as a discount factor for corporate value is a medium- to long-term concern," adding, "Recently, domestic institutional investors have increasingly emphasized non-financial factors such as sustainability and ethical management in addition to short-term earnings, and global asset managers are also making ESG evaluations a key investment criterion. As a result, companies with high ESG risks are increasingly being classified as excluded from investment or subject to reduced weighting."