[Edaily Reporter Shin Ha-yeon] On the 12th, NH Investment & Securities assessed that while a decline in sales is inevitable due to the slump in the domestic liquor market, HiteJinro has a high probability of recovering profitability next year based on cost-cutting efforts and the expansion of its overseas business. However, reflecting revised earnings estimates, the firm lowered its target price to 23,000 won, an 8% decrease from the previous level.

Joo Young-hoon, an analyst at NH Investment & Securities, stated, “While the slower-than-expected market recovery due to declining domestic alcohol consumption is a cause for concern,” he added, “the company, as the industry leader, is maintaining a stable market share, and despite the decline in sales, we believe there is a high likelihood of a rebound in annual operating profit by 2026 through cost-cutting efforts.”

The firm projected that second-quarter consolidated revenue would reach 621.2 billion won and operating profit 55.0 billion won, falling short of market expectations. Operating profit is estimated to decline by 14.6% year-over-year.

Regarding the soju business, the firm expects stable performance to continue based on strong market dominance. Analyst Ju stated, "Despite a decline in domestic alcohol consumption, soju sales are holding steady thanks to high market dominance," adding, "The trend of rising market share in non-metropolitan areas is continuing, and we also expect overseas sales to expand following the completion of the Vietnam plant."

Conversely, the beer division is expected to remain sluggish for the time being. He analyzed, “Due to the decline in the culture of company dinners, the market slump is more severe compared to soju, and there is a volume burden caused by pent-up demand ahead of the planned price hike for the same period last year.” However, he added, “Considering the base effect, the decline in sales is expected to ease, with the second quarter marking the bottom.”

He cited dividend appeal as a factor supporting the stock’s downside. The analyst noted, “The company’s estimated dividend yield is 4.4%, which is higher than the industry average and serves as a factor supporting the stock’s downside.” He added, “Furthermore, with the Vietnam plant scheduled for completion in 2026, expectations for the expansion of overseas operations are likely to be reflected as we approach the end of the year.”