BGF Retail(282330), after posting second-quarter results that beat market expectations, is surging in early trading as brokerages project earnings improvement in the second half.
At 10 a.m. on the 7th, BGF Retail is trading at 153,500 won on the main board, up 20,000 won (14.98%) from the previous session.
On a consolidation basis, BGF Retail's second-quarter revenue was 2.4268 trillion won, up 6.0% from a year earlier. Operating profit was 84.9 billion won, up 22.3%. Despite one-off expenses from a logistics center strike, early heat, consumption coupons for people's livelihoods, and an increase in foreign tourists visiting Korea helped improve results.
Korea Investment & Securities Co. on the day raised its target price for BGF Retail by 12.1% to 185,000 won from 165,000 won and maintained a "buy" rating.
Kim Myung-joo, an analyst at Korea Investment & Securities Co., said, "Although there were one-off expenses in the second quarter, it is impressive that operating profit beat market expectations," and noted, "Weather effects sharply increased sales of high-margin products such as ice cream and beverages, improving the gross profit margin (GPM) by 0.4 percentage point from a year earlier."
Kim added, "Stable results are expected in the second half as well, and as this stands out, BGF Retail's share price will likely maintain a favorable trend."