[Click e-Stock] "BGF Retail: From Strong Earnings to Shareholder Returns...Stock Revaluation Expected"

Earnings Estimates Raised for This Year
Target Price Increased to 200,000 Won

On September 16, Heungkuk Securities raised its target price for BGF Retail from 190,000 won to 200,000 won and maintained its "Buy" investment rating.

Park Jongryul, a research analyst at Heungkuk Securities, analyzed BGF Retail, stating, "The company is expected to continue its solid business performance in the second half of the year, benefiting from structural changes in consumption patterns due to the rise in single- and two-person households, as well as increased spending by foreign tourists."

He further explained that the target price was raised as the earnings forecasts for 2026 and 2027 were upgraded. Park added, "Despite the share price gains since the end of June, BGF Retail's 12-month forward price-earnings ratio (PER) and price-book ratio (PBR) are still attractive at 10.6 times and 1.6 times, respectively. We believe the stock can undergo a continued revaluation, given future solid earnings momentum and increasingly expanded shareholder returns."

For the third quarter of this year, BGF Retail is expected to post consolidated revenue of 2.6 trillion won and operating profit of 108 billion won. The company is forecast to maintain firm top-line growth, driven by the opening of high-quality new locations, expansion of mid- to large-sized stores, and improved same-store sales growth.

The annual consolidated revenue for this year is expected to reach 9.5 trillion won, with operating profit projected at 306.7 billion won, reflecting an upward revision. Park said, "With increased sales at existing stores, an expanded lineup of high-margin products, and enhanced operational efficiency all progressing simultaneously, BGF Retail is well-positioned for stable profit growth."

Since 2023, BGF Retail has shifted away from its previous focus on network expansion and is now committed to strengthening individual store fundamentals by increasing the proportion of mid- to large-sized outlets. Its business strategies include: ▲ expanding its customer base to include female and foreign customers, ▲ increasing differentiated product offerings, and ▲ strengthening its grocery platform business. In addition, on April 30, BGF Retail announced a plan to enhance corporate value, including its aim for a shareholder return ratio of 40%, signaling a commitment to expanding shareholder rewards.

This content was produced with the assistance of AI translation services.