] Hite Jinro
’s third quarter operating profit will not be able to meet market consensus, weakening the expectations for dividends that have been bolstering the stock price, according to Samsung Securities on Oct. 14.
The securities firm maintained a “buy” recommendation but lowered the target price to 27,000 won (US$23.85).
The liquor giant’s operating profit in the third quarter will fall 15 percent to 40.9 billion won, and revenue will slip 0.5 percent to 504.4 billion won from the same period last year, according to Samsung. The operating profit is 14 percent less than market consensus.
This is mainly due to “the lackluster sales of beers,” said Yang Il-u, an analyst at Samsung. Hite Jinro has been paying 1,000 won per share for dividends in 2014 and 2015, but its operating profit should be over 140 billion won to able to pay dividends, he explained.
The stock price has hit the bottom, though, and is expected to rebound when the beer price is raised, added the analyst.
By Hwang You-mee (firstname.lastname@example.org