April 25, 2024

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[THE INVESTOR] Lotte Food’s profits will return to normal, said Mirae Asset Daewoo on July 24, maintaining a “buy” recommendation and raising the target price to 1.05 million won (US$924.05) from 880,000 won.

Its revenue in the second quarter will rise 0.4 percent on-year to 478.1 billion won and operating profit by 18.4 percent to 23.2 billion won, said analyst Baek Un-mok underlining that it confirms a turnaround for two consecutive quarters.

Rise in operating ratio of ready-to-eat food for convenience stores, regain in margin for imported beef, strong sales of new frozen desserts and stabilizing commodity price have buoyed its bottom line. Operating profit for this year and next year will increase 20.7 percent and 13.1 percent respectively, the analyst estimated.

The food company has come out of the worst environment last year and is improving itself across sectors, which will lead to better margins, according to Baek. 

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