April 27, 2024

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[THE INVESTOR] Lotte Chilsung’s earnings and stock price hinge on the operation ratio of its beer plants, said KTB Investment and Securities on June 26, maintaining a “buy” recommendation and raising the target price to 2.1 million won (US$1,847).

Its revenue in the second quarter will rise 7.4 percent on-year to 674.9 billion won while operating profit will fall by 13.5 percent to 43.9 billion won estimated analyst Son Ju-ri.

Its liquor business will grow 6 percent, as in addition to soju, sales of its beer brand Kloud increased in April-May, boosting the yearly revenue to 170.2 billion won, according to the analyst. 

The operation rate of two beer factories is 30 percent and from the third quarter, depreciation from the second plant will be reflected. The losses from the rise of first factory will also decrease slightly, noted Son. 

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