April 26, 2024

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[THE INVESTOR] Dongwon F&B has improved on the back of strong sales of main products in the second quarter, said KB Investment and Securities on Aug. 3, maintaining a “buy” recommendation and raising the target price to 320,000 won (US$283.56) from 285,000 won. 

Its operating profit in the period hiked 51.18 percent to 13.2 billion won and revenue rose 7.59 percent to 33.5 billion won. Considering that this also reflects 3.5 billion won in incentives increase, the profits improvement is noticeable. Solid sales of main products, downward stabilizing raw material prices and cost structure improvement boosted the earnings, said analyst Park Ae-ran. 

The bottom line was buoyed by strong sales, price rise of tuna, continued growing momentum of dairy products, cupped coffee and fermented milk, and introduction of home meal replacement brand. Its revenue in the third quarter will rise 9.8 percent on-year to 803.9 billion won and operating profit by 23.7 percent to 36.9 billion won. The sound growth of main products and Chuseok holiday effect will be reflected in the second half, according to the analyst. 

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