[Stock in Focus] April Newborns Rebound... Erkos Up Over 5%

The stock price of Erkos, which owns the premium baby food brand 'LUSOL', is on the rise. As the number of newborns as of April increased compared to the previous year, attention is also growing on Erkos, which has been considered a beneficiary of low birth rate policies.

As of 9:34 a.m. on the 26th, Erkos was trading at 19,060 won, up 980 won (5.42%) from the previous trading day.

Kiwoom Securities evaluated Erkos on this day, stating, "We expect profitability to improve in the second half of the year." Park Sangjun, a researcher at Kiwoom Securities, explained, "First-quarter results were somewhat sluggish due to weakened domestic consumer sentiment caused by political uncertainty, as well as intensified competition resulting from low-priced promotions by competitors." However, he analyzed, "From the second half of the year, profitability is expected to improve to some extent, driven by a two-track pricing strategy, the resolution of unfavorable external factors, and the expansion of dessert sales."

Park added, "Of course, concerns remain about the contraction of the infant food market due to the continued decline in the domestic birth rate." However, he also stated, "Recently, with the increase in dual-income couples, it has become a trend among parents of infants and young children to stop breastfeeding or formula feeding earlier and to start baby food earlier. As a result, the baby food market is showing stronger growth compared to the formula market."

According to data released by Statistics Korea, the number of newborns in April increased by 8.7% compared to a year earlier. The total fertility rate in Korea (the average number of children a woman is expected to have during her childbearing years) continued to decline to 0.72 in 2023, but rebounded to 0.75 last year for the first time in nine years.