[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 12th that it is maintaining its “Buy” rating and 150,000 won target price for LotteChilsungBeverage(005300).

Joo Young-hoon, an analyst at NH INVESTMENT & SECURITIES, noted, “Cost pressures caused by rising prices of key raw materials and supplies persist, and demand recovery remains sluggish due to a slump in domestic consumption,” but added, “Profitability is expected to recover compared to the first half of the year through price increases and efforts to improve the product mix.”
He stated, “We believe concerns about earnings have already been reflected in the stock price, and given the low valuation of 8.8 times P/E (price-to-earnings ratio), the potential for further stock price declines is limited.”
Overseas operations are a key investment focus from a medium- to long-term perspective. Analyst Ju said, “The company aims to expand the share of overseas operations in total revenue to 50% by 2030 (40% by 2025). Performance in overseas operations is a key indicator determining the valuation of food and beverage companies,” he noted. “Although overseas subsidiaries are experiencing a temporary decline in profitability due to the war in the Middle East in 2026, once earnings normalize, the company’s higher-than-industry-average share of overseas business is likely to be highlighted.”
Consolidated third-quarter revenue and operating loss are projected to be 1.1063 trillion won (+2.5% year-over-year) and 81.8 billion won (-10.9%), respectively, in line with consensus estimates. He noted, “We estimate that revenue in the beverage segment will decline by 1.1% year-over-year. The impact of reduced demand due to the slump in domestic consumption continues,” he noted, adding, “Although we implemented an average product price increase of 5.3% in June to offset rising raw material costs, it will take time for profitability to improve given the sluggish shipment volume.”
Revenue in the spirits segment is estimated to increase by 3.7% year-over-year, driven by strong performance in soju and “RTD” (Ready-to-Drink) products.
He continued, “We expect profitability at major overseas subsidiaries to remain weak, as it was in the second quarter. This is because the impact of the war in the Middle East is being felt more acutely there than in the domestic market.” He added, “Since these subsidiaries had been showing steep improvements in performance before this issue arose, we believe there is a high likelihood of normalization in the future, and we expect their contribution to consolidated earnings to increase.”