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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] On May 23, IBK Investment & Securities downgraded its target price for SPC Samlip (KRX: 005610) by 20.3% to KRW 59,000, citing repeated safety incidents within the SPC Group that have hindered investor sentiment. The firm maintained a ‘Neutral’ rating. The stock last closed at KRW 52,900.
Analyst Kim Tae-hyun noted, “In the past five years, recurring injury and fatality incidents within the SPC Group have led to reputational damage and weakening investor sentiment. Regardless of earnings performance, the persistent ESG risks have become a structural discount factor in the company’s valuation, raising long-term concerns.”
In the first quarter of 2025, SPC Samlip reported consolidated revenue of KRW 814.8 billion, down 1.9% year-over-year, and operating profit of KRW 16.1 billion, a 7.2% decline. Both figures missed market expectations (KRW 859.2 billion / KRW 20.7 billion) and IBK’s estimates (KRW 850.7 billion / KRW 19.6 billion).
The underperformance was attributed to increased selling, general and administrative expenses, including advertising and outsourcing costs, which impacted margins across its bakery, food, and distribution segments.
Further compounding concerns, a recent fatal workplace accident led to production disruptions, which Kim expects to weigh on both performance and stock valuation in the near term.
Historical data suggests a consistent market reaction to safety incidents. Following fatal accidents in 2022 and 2023, SPC Samlip shares saw 3-month returns of -9.5% and -7.8%, and 6-month returns of -6.7% and -13.1%, respectively. Institutional and foreign investors also showed notable net selling in response.
“Domestic institutional investors are increasingly focusing on non-financial factors such as sustainability and ethical management,” Kim added. “Global asset managers also regard ESG ratings as core investment criteria.”
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
