[Edaily Reporter Kwon Oh Seok ] Yuanta Securities Korea announced on the 10th that it is maintaining its “Buy” rating on LOTTE WELLFOOD(280360)and raising its target price from 140,000 won to 165,000 won.

Son Hyun-jung, an analyst at Yuanta Securities Korea, stated, “While the decline in cocoa input prices will be reflected in the second half of the year, additional cost burdens of approximately 40 to 50 billion won are expected due to fats and oils, dairy products, and exchange rates. However, this is expected to be largely offset by reduced ERP (Enterprise Resource Planning) costs, improved domestic operational efficiency, the normalization of production in India, and the effects of overseas price increases.”
The firm forecasts consolidated revenue for 2026 at 4.496 trillion won (up 6.6% year-over-year) and operating profit at 217.8 billion won (up 98.9%). Analyst Son explained, “We have raised our earnings estimates to reflect improvements in the domestic cost structure and overseas growth centered on India.”
In the second quarter of this year, consolidated revenue reached 1.1557 trillion won (+8.6%) and operating profit reached 64.7 billion won (+88.5%), significantly exceeding market expectations. He said, “In addition to growth in major domestic businesses and expanded overseas sales in India and Kazakhstan, the effects of reducing low-margin SKUs (product lines) and inefficient promotions, as well as streamlining workforce, production, and procurement, have begun to be fully reflected.”
He added, “The cumulative effect of management improvements in the first half of the year amounted to approximately 70 billion won, offsetting more than 50 billion won in burdens from raw materials and exchange rates. It is important to note that this profit improvement stemmed from a change in the cost structure itself, rather than simply a decline in costs.”
In particular, domestic sales reached 859.8 billion won (+3.3%), while operating profit stood at 38.4 billion won (+50.2%). The increase in profit was more pronounced than the growth in revenue, confirming the effectiveness of operational efficiency measures. Overseas subsidiaries posted revenue of 311.2 billion won (+27.6%) and operating profit of 29.6 billion won (+132.5%), while sales in India continued their strong growth at 133.4 billion won (+27.9%). Researcher Son added, “The yield rate at the Pune plant reached 95.5%, the average utilization rate in the second quarter rose to 61%, and the company secured a foundation for further growth with the launch of the fourth Choco Pie production line in June.”