Sangsangin Investment & Securities said on the 25th that, unlike frozen products, the chilled institutional sector continues to post weak results for Binggrae. It lowered its target price to 110,000 won from 120,000 won while maintaining a "buy" rating. The previous trading day's closing price for Binggrae was 73,700 won.
In the third quarter of this year, Binggrae's consolidation-based sales and operating profit came in at 479.2 billion won and 58.9 billion won. They rose 3.3% and fell 8.9% from a year earlier, respectively. Sales at consolidated subsidiaries, including overseas entities and Haitai Ice Cream, were sluggish. Chilled sales declined 4% on-year, marking negative growth, with both domestic and export sales down.
Kim Hye-mi, an analyst at Sangsangin Investment & Securities, said, "In the case of domestic demand, the rebound in consumer sentiment has been delayed, and one of the key channels, discount stores, was excluded from the payment of 'consumption coupons' for people's livelihoods," adding, "Exports have been affected by continued declines in sales to China." By product, sales appear to have decreased for most items, including processed milk, fermented milk, and juice, except coffee.
Binggrae raised prices on some products in March this year to ease the burden of rising costs. However, the effect on improving results appears limited. Kim said, "Weakness continues in the frozen and chilled institutional sector, so above all, a turnaround in sales volume for chilled items is crucial."
Kim added, "Although consumption recovery is delayed not only in Korea but also in China, a key export destination, it is positive that profitability at consolidated subsidiaries, including overseas entities, is improving and sales of frozen items continue to grow."