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Meritz Securities maintained its investment opinion on Hite Jinro and an appropriate stock price of 48,000 won on the 28th.
While the liquor industry is expected to remain sluggish due to the prolonged COVID-19, the company is expected to expand its market share in the event of a recovery in the B2B market.
Hite Jinro's estimated second-quarter sales were 565.7 billion won and operating profit was 47 billion won, down 2.7 percent and 13 percent, respectively, from a year earlier.
This is due to the high weight base effect in the second quarter of last year amid the prolonged COVID-19 impact. "The tightened ban on operations after 10 p.m. and the ban on meetings with five or more employees have contributed to the decline in sales compared to last year.
The intensifying liquor competition has led to sluggish profitability along with the burden of falling sales," Meritz Securities Co. said. With the fourth pandemic of COVID-19, the sluggish liquor industry is prolonged.
As the center of gravity has shifted to the home beer market, the price reduction strategy of B2C products is expected to be positive in terms of expanding market share.
"The sluggish second-quarter performance will not deviate much from the expected level," Meritz Securities said. "The investment points whose market share will be resumed when the B2B market recovers are valid.".
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com