DS Investment Securities said on the 18th that Binggrae(005180) succeeded in value-up in line with the corporate value enhancement plan released in March, and assessed that this effect appeared in the second-quarter results. It maintained a "Buy" investment opinion and raised the target price to 120,000 won. Binggrae's previous trading day closing price was 82,400 won.
Binggrae posted consolidated sales of 442.1 billion won and operating profit of 69.7 billion won in the second quarter of this year. They rose 8% and 160%, respectively, from a year earlier, with operating profit far exceeding the market consensus (25 billion won).
Jang Ji-hye, an analyst at DS Investment Securities, said, "The earnings surprise was driven by the streamlining of low-profit minimum management units (SKU) carried out since the previous year, operational efficiencies through the merger with Haitai, growth in high-margin export performance, and tariff refunds at the U.S. subsidiary."
In particular, it was analyzed that the company clearly benefited from successfully achieving value-up as planned in the corporate value enhancement plan released in March.
On Mar. 4, Binggrae released a corporate value enhancement plan, presenting goals including business structure and operational efficiency through the absorption-type merger of subsidiary Haitai Ice Cream Co., profitability management focused on core brands and SKUs, stable facility investment (CAPEX), sales expansion centered on major overseas markets, and a dividend target of at least 25% based on separate net income.
Jang said, "These effects appeared as improved second-quarter results, and in the second half, with the domestic ice cream peak season, operational efficiencies and profitability management effects are expected to become more pronounced."
On the product side, beyond ice cream, Banana Flavored Milk, which is expected to benefit from inbound demand, as well as protein and meal-replacement nutrition products suited to the health-oriented consumption trend, are also expected to grow.
Meanwhile, overseas is expected to be somewhat sluggish compared with the first half as export seasonality enters the off-season, but growth centered on the United States and China is expected to continue.