April 19, 2024

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[THE INVESTOR] Shinsegae Food’s earnings in the first quarter will be better than expected, said KB Investment and Securities on April 10, maintaining a “buy” recommendation and raising the target price to 160,000 won (US$149.69) from 150,000 won.

Its revenue in the period will rise 15.3 percent on-year to 328.2 billion won and operating profit by 52.2 percent to 7.3 billion won. The estimated operating profit is close to 35 percent higher than expected, said analyst Park Ae-ran.

The unit price of catering services has offset burden of personnel costs and winning the order for PyeongChang Winter Olympics. The sharp rise in food engineering will help the earnings improvement, noted the analyst. 

Revenue this year will increase 11.4 percent to 1.35 trillion won and operating profit by 21.3 percent to 36.2 billion won, forecast Park. 

Its strategy to deal with minimum wage hike has been confirmed and the large growth potential of high-margin food engineering sector also should be worth noting, she added.

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