April 19, 2024

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[THE INVESTOR] OB beer sales will recover and the factory price hike will bolster the earnings of Hite Jinro this year, said KB Investment and Securities on Jan. 13, maintaining a “buy” recommendation and 26,000 won (US$22.07) target price. 

Its 2017 revenue will increase 4.8 percent to 1.98 trillion won and operating profit 17.6 percent to 130.5 billion won on-year, forecast analyst Park Ae-ran. 

“The market share and price are the key factors in liquor industry where quantitative growth is limited, and OB beers’ sales volume will return to normal from last year, when its sales plummeted due to a price hike rumor,” said the analyst. The decrease in fixed cost due to higher operational ratio and price raise will also work in its favor, added Park.

Hite Jinro’s imported beers will also grow, taking up 7.7 percent of revenue from the beer division from last year’s 6.5 percent, and the collection of balance from sale of its real estate in Seocho-dong, southern Seoul, will be reflected as well, said the analyst. 

By Hwang You-mee (glamazon@heraldcorp.com)