[Click e-Stock] "Kyochon F&B, Solid Performance"

On August 29, IBK Investment & Securities stated that although Kyochon F&B's second-quarter results fell short of estimates, the company is expected to maintain stable growth.

In the second quarter, Kyochon F&B recorded sales of 126.1 billion won and an operating profit of 9.3 billion won. Compared to the same period last year, sales increased by 10.7%, and the company turned to an operating profit from a loss.

Nam Sung-hyun, a researcher at IBK Investment & Securities, explained, "Operating profit was about 10% below the estimate of 10.4 billion won," adding, "The temporary reduction in supply prices to franchise stores occurred as the origin of wing products was changed."

He continued, "The weak profitability in the second quarter is likely due to short-term issues," and added, "We expect profit growth from the direct management conversion of regional franchise headquarters and overall expansion."

Researcher Nam analyzed, "The reduction in the prices of exclusive oil and wing products supplied to franchisees can be interpreted as a win-win measure," and added, "It is a strategy to enhance trust with franchise owners and lay the foundation for sustainable management amid the difficulties faced by the self-employed market."

He further emphasized, "Although this temporarily caused results to fall short of expectations, it is a positive factor in the medium to long term as part of building a stable business structure."

He explained, "This year, profit is expected to increase due to the effect of consumer coupon distribution and the conversion of regional franchise headquarters in the second half," and added, "Concerns about the second-quarter results are expected to be resolved."