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[Alpha Biz= Reporter Kim Sangjin] On the 10th, KB Securities projected that Lotte Chilsung's overseas subsidiaries will increasingly contribute to its performance. It maintained its "Buy" rating and target price of KRW 170,000.
KB Securities stated, “The acquisition of management rights for Pepsi Philippines and the growth of its Myanmar and Pakistan subsidiaries are enhancing the contribution of Lotte Chilsung's overseas businesses. If this contribution becomes more visible, valuation re-rating is expected.”
It further highlighted, “Pepsi Philippines, with its high growth potential, is set to lead overseas performance and expand its role as an export hub. Additionally, the Myanmar and Pakistan subsidiaries are likely to benefit from growing beverage markets, boosting their results.”
The company’s mid-to-long-term value enhancement and shareholder return strategy were also viewed positively. Analyst Ryu commented, “Strengthened financial soundness and increased shareholder return ratios, as part of the company's value enhancement plans, are expected. These plans should be achievable through expanded contributions from overseas subsidiaries and improved profitability in standalone operations.”
Ryu also predicted a 2.9% dividend yield for Lotte Chilsung next year and noted that the valuation gap with global beverage peers is likely to narrow.
For 2025, KB Securities estimated Lotte Chilsung’s consolidated revenue and operating profit at KRW 4.3648 trillion and KRW 255.1 billion, respectively, representing year-on-year increases of 5.9% and 19.5%. The operating profit projection aligns with the market consensus of KRW 255 billion.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
