IBK Securities noted on the 16th that Binggrae's first-quarter performance fell short of market expectations (consensus) due to rising prices of materials and supplies such as cocoa and coffee, as well as the burden of labor costs from the application of regular wages. The main factor determining this year's performance is expected to be seasonal weather. The target price was lowered by 8.3% from the previous 120,000 won to 110,000 won, while maintaining the investment opinion of 'buy.'
Kim Tae-hyun, a researcher at IBK Securities, said, "With price increases for some products implemented in early March, the burden of costs is expected to gradually ease," but added, "Considering the reflection of regular wages each quarter, the improvement in cost ratios may be limited."
Binggrae's consolidated revenue for the first quarter of this year was 308.5 billion won, with an operating profit of 13.5 billion won. This represents increases of 2.5% and decreases of 36.1%, respectively, compared to the previous year. Revenue met consensus expectations, while operating profit did not.
By institutional sector, the refrigerated sector saw a decrease of 5.8% to 144.2 billion won compared to the same period last year. This is the first time since the first quarter of 2018 that the quarterly revenue decline in refrigerated products has exceeded 5%. Frozen goods recorded sales of 140.9 billion won, an increase of 14.2% during the same period.
By corporation, the U.S. subsidiary achieved sales of 201.0 billion won and a net profit of 3.0 billion won due to increased sales of ice cream. China saw a decrease in revenue to 8.3 billion won due to reduced marketing, though net profit improved to 600 million won. Meanwhile, in Vietnam, sales increased due to expanded promotions, but net profit declined.