[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 10th 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, explained, “Amid the ongoing slowdown in domestic consumer spending, profitability continues to deteriorate due to rising prices of raw materials such as aluminum and cans.” He added, “Overseas subsidiaries also saw a sharp decline in operating profit as material and transportation costs increased due to the fallout from the war in the Middle East.”
Reflecting this deterioration in operating conditions, the firm decided to lower its 2026 operating profit guidance from the previous 200 billion won to 185 billion won. Analyst Joo stated, “The current stock price trades at a price-to-earnings ratio (PER) of 8.1x, and we believe concerns regarding earnings have already been factored into the stock price,” adding, “Considering recent trends in exchange rates and raw material prices, we expect profitability metrics to gradually improve, with the third quarter serving as the trough.”
He further emphasized, “For the fourth quarter, given the low base caused by a loss in the same period last year—which was due to one-time factors such as labor costs and provisions—we expect the company to return to profitability,” adding, “The growing recognition of the value of the Seocho site is also a positive factor for corporate value.”
On a consolidated basis, third-quarter revenue and operating profit were 1.0501 trillion won (-2.7% year-over-year) and 57 billion won (-37.9% year-over-year), respectively, falling short of the consensus estimate for operating profit. Revenue in the beverage division decreased by 4.7% year-over-year. Although the company implemented a product price increase (averaging 5.3%) last June, sales remained sluggish due to market stagnation and the timing difference of the holiday season. He explained, “Operating profit also declined significantly year-over-year due to the combined impact of lower shipment volumes and rising cost ratios.”
Revenue in the spirits segment increased by 2.5% year-over-year. He said, “Soju and ready-to-drink (RTD) products are performing well, and the impact of rising raw material prices has been limited, leading to improved profitability.”
In addition, overseas subsidiaries performed poorly overall, similar to the second quarter. This was because the impact of rising oil prices due to the war in the Middle East was felt more acutely there than in the domestic market. Analyst Ju added, “In particular, the Myanmar subsidiary even suffered revenue losses due to instability in the supply of raw materials,” but noted, “Since these subsidiaries had been showing steep improvements in performance prior to this issue, we believe there is a high likelihood of normalization in the future and expect them to increase their contribution to consolidated earnings over the medium to long term.”