[THE INVESTOR] Lotte Confectionery’s mid- to long-term momentum is weakening, said NH Investment and Securities on Nov. 17, lowering its target price to 194,000 won (US$177.06) from 214,000 won.
As Lotte Group transforms into a holding company system, the confectionery arm’s stake in other affiliates and most of its stakes in overseas confectionery subsidiaries are being transferred to the holding company. The size of its capital will also shrink to one third, while profits for next year are expected to fall 20 percent from last year, said analyst Han Guk-heui.
Although there is the possibility that it will buy back its overseas confectionery subsidiaries but until a clear decision has been made it could hurt the stock price, pointed out the analyst maintaining a “hold” recommendation.
By Hwang You-mee (email@example.com)