Hyundai Motor Securities noted on the 19th that Dongwon F&B is expected to face difficulties in growth as domestic economic stagnation has led to a decline in food and restaurant demand. Hyundai Motor Securities maintained a 'buy' rating on Dongwon F&B, but adjusted the target price down by 4% to 50,000 won.
Ha Hee-ji, a researcher at Hyundai Motor Securities, observed that there were limitations to the revenue growth of Dongwon F&B in the third quarter of this year due to the decrease in restaurant demand. Ha noted, “The lunchflation effect has shown favorable performance in the school meal sector,” but analyzed that “the demand decrease in the profitable restaurant sector has resulted in a decline in operating profits.”
Ha predicted that 2025 will also see challenges for Dongwon F&B's growth due to ongoing economic stagnation. He stated, “To respond to weak sales, Dongwon F&B is increasing its expenditure on promotions,” adding, “The impact of deteriorating restaurant conditions is becoming visible.”
However, Ha assessed that the ingredient-centered business structure could serve as a support. He stated, “Dongwon F&B is expected to achieve cost improvements by the first half of 2025,” noting that “improvements in fish prices, such as tuna, will have a positive effect on performance.”